Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GLAMORGAN COUNTY COUNCIL BILL [Lords]

As amended, considered.

Amendments made.

To be read the Third time.

Oral Answers to Questions — FREIGN AND COMMONWEALTH OFFICE

Hong Kong

Mr. Sillars: asked the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to improve labour conditions in Hong Kong.

The Minister of State for Foreign and Commonwealth Affairs (Lord Balniel): Labour legislation and enforcement in Hong Kong are primarily matters for the Hong Kong Government and are kept under constant review. Since 1964 no fewer than 83 separate items of legislation have been enacted.

Mr. Sillars: Does the hon. Gentleman not agree that the British Government have a responsibility in respect of labour laws, since Britain is a constituent member of the ILO? Does he further agree that the British Government could make a major contribution if, as a start, they were to implement ILO Conventions Nos. 24, 32, 94 and 98?

Lord Balniel: As I have said, these are matters primarily for the Hong Kong Government, but Her Majesty's Government also have a responsibility. I shall look at the long list of resolutions mentioned by the hon. Gentleman to see if they will be helpful.

Mr. Tilney: Does my hon. Friend agree that, thanks to the actions of the Hong Kong Government and the work of the people of Hong Kong, the improvement in the well-being of the Hong Kong people in recent years has been quite remarkable?

Lord Balniel: That most certainly is the case. Real wages in Hong Kong have risen by 56 per cent. since 1964 and Hong Kong wages are now the highest in Asia, outside Japan.

Colonialism and Apartheid (Conference)

Miss Lestor: asked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government will be represented at the Conference sponsored by the United Nations and the Organisation of African Unity on Colonialism and Apartheid in Oslo during the month of April.

Lord Balniel: No final decision has yet been taken on whether to nominate experts to attend this conference.

Miss Lestor: May I strongly urge the hon. Gentleman to consider sending somebody to this conference? Is he not aware that if the British Government boycott this conference, which is supported by the OAU and the United Nations—and let us remember that we shall be boycotting it at a time when Britain is celebrating the Anglo-Portuguese alliance—this will confirm the suspicions of many people that Britain is likely to be on the wrong side of the struggle against apartheid in southern Africa?

Lord Balniel: I am not sure that that would be the conclusion reached by other countries, but we have not yet reached a final decision. We abstained on the resolution to set up the conference because we were doubtful whether it would make a useful contribution to the solution of South Africa's problems. But, as I have said, no final decision has yet been taken.

Mr. Biggs-Davison: Will the largest example of colonialism that still exists in the world, namely, that of the Soviet Union, be discussed at this conference? That might determine our attitude.

Lord Balniel: I do not think that the agenda for the conference has yet been settled.

Pakistani Prisoners-of-War

Mr. Biggs-Davison: asked the Secretary of State for Foreign and Commonwealth Affairs whether, having regard to the Third Geneva Convention of 1949, Her Majesty's Government will offer their good offices to facilitate the repatriation of Pakistani prisoners-of-war from India.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): We have already made known our willingness to help with any of the problems over reaching a settlement in the subcontinent, if the countries themselves seek our help and are agreed on the rôle we should play. But, as my hon. Friend will know, India and Pakistan agreed at Simla last July to settle their differences through bilateral negotiations. This probably holds the best prospect of success for the present.

Mr. Biggs-Davison: Is not the holding so long after the ending of hostilities of perhaps 90,000 prisoners—if civilians are included—contrary to international convention, contrary to the canons of humanity and something of a Commonwealth scandal?

Sir Alec Douglas-Home: The subject of prisoners is a great human problem, and I am aware that the Pakistanis feel deeply about it. We want to get results. I do not know whether my hon. Friend is aware that Dr. Waldheim has recently visited India, Pakistan and Bangladesh. He said that he had useful talks in all three capitals and was impressed by the serious intent of all the parties to reach a settlement. I hope that this matter will be pursued trilaterally in the subcontinent.

Mrs. Castle: Is the Foreign Secretary aware that I made representations to him on this matter as far back as December and that the situation has in no way changed since his reply? Does he appreciate that feeling is running very high among the 4,000-strong Pakistani community in my constituency? Will he renew his efforts to get a solution to this problem?

Sir Alec Douglas-Home: Yes, the right hon. Lady is quite right. I have already said that this is a great human problem. I have no doubt about the feelings of the Pakistanis. The problem is to

get results, and to get them as quickly as we can. I have already told the House that the Secretary-General has recently applied himself to this task in the countries concerned. We must wait a little longer to see whether there is any useful action we can take over and above that.

Mr. John Hall: Will my right hon. Friend hazard a guess at the reason why the Indian Government are so reluctant to let these prisoners go, since this must be an additional burden on them which they must sustain?

Sir Alec Douglas-Home: The Indian Government would like to see the prisoners go as fast as they can, but they have a bilateral relationship with Bangladesh.

Mr. Edward Lyons: I appreciate the complex arguments and the disputes in that part of the world but ought not the right hon. Gentleman to make an approach in respect of the women, children and merchant seamen—the non-combatants—held and classed as prisoners-of-war, and urge his right hon. Friend the Prime Minister at the forthcoming Commonwealth Prime Ministers' Conference to raise with the Indian Prime Minister the possible release of all these prisoners?

Sir Alec Douglas-Home: Yes, Sir. We are in constant touch with the countries concerned. The Red Cross in India and Bangladesh has made arrangements for the transfer of civilians so that some Bengalis may go back to Bangladesh and others in Bangladesh who wish to go to Pakistan may do so. It is a continuing process. But I should prefer to get in touch with the hon. Gentleman to give him more details, if I may.

Middle East

Mr. Roy Hughes: asked the Secretary of State for Foreign and Commonwealth Affairs if he intends taking any fresh initiatives to secure the implementation of Her Majesty's Government's sponsored United Nations Resolution 242, November 1967.

Sir Alec Douglas-Home: The policy of Her Majesty's Government in the Middle East remains to do all they can to help towards a peaceful settlement on the basis of Security Council Resolution 242 of November 1967. If there


was any particular step which we thought could assist a settlement we should take it. But that is not the case at the present time.

Mr. Hughes: Does the right hon. Gentleman agree that the shooting down of the Libyan aircraft and the recent raid on the Lebanon by the Israelis give fresh impetus to the need to implement Resolution 242, especially with regard to withdrawal from occupied territories? Will the right hon. Gentleman assure the House that he will make our viewpoint on this matter crystal clear to the American Government?

Sir Alec Douglas-Home: I agree that the latest incident—the shooting down of the aircraft—has been a very grave development in a situation which is already bad enough. When the hon. Gentleman says that we ought to make progress on complete withdrawal by the Israeli occupying forces, I agree with him. We ought to. We shall make every effort to get the Israelis to agree. But no one has yet been able to marry a formula for military withdrawal with security for Israel of her frontiers.

Mr. Fidler: Will my right hon. Friend confirm that it is his view that the only way to achieve a just, viable and lasting peace in the Middle East is to bring the two sides together round the same negotiating table? Will he use his initiative to press upon Israel and her Arab neighbours the importance of getting round that negotiating table to achieve what we all desire?

Sir Alec Douglas-Home: I do not think that the matter can be settled until there is direct negotiation. But neither party will yet agree on the basis of a meeting. That was the hope of Dr. Jarring. But progress is being made.

Mr. Goronwy Roberts: Is the right hon. Gentleman in close co-operation and consultation with the Americans in respect of their initiative in this matter?

Sir Alec Douglas-Home: Yes, Sir. I hope that the Americans have an initiative.

Ghana (British Companies)

Mr. Tilney: asked the Secretary of State for Foreign and Commonwealth

Affairs whether the Ghanaian Government are making prompt and adequate payments for the 55 per cent. equity in British mining and timber companies compulsorily acquired by degree; and whether appropriate compensation will be paid in respect of the announced compulsory acquisition of shares in other British and foreign-owned business.

Lord Balniel: Her Majesty's Government have made representations to the Ghanaian Government, reminding them of the need under international law for prompt, adequate and effective compensation for the acquisition of a participating interest in British companies. We have received an assurance that fair compensation will be paid. The Ghanaians are negotiating the terms of participation with the firms concerned.

Mr. Tilney: Has my right hon. Friend any advice to give to firms at present trading in Ghana which for years have been unable to remit any profits? Does not the recent action by the Government of Ghana militate against any fresh investment of Western capital in Ghana or, for that matter, in any nearby African country?

Lord Balniel: A refusal to allow a remittance of earnings and any failure to pay prompt and fair compensation for acquisition must adversely affect investment. The World Bank, on behalf of the Western creditors, presented the Ghanaian Government with proposals for a debt settlement in November 1972 and we are awaiting the Ghanaian Government's response to that proposal.

Falkland Islands (Reindeer)

Mr. David James: asked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made over the proposal to introduce reindeer into the Falkland Islands from South Georgia.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Julian Amery): The feasibility of this scheme is under investigation by the Falkland Islands Company.

Mr. James: Is my right hon. Friend aware that the handful of reindeer imported into South Georgia from Norway in the early 1900s are now several thousand strong and that they have adapted


themselves to converting Tussock grass and therefore do not compete with sheep? Is my right hon. Friend further aware that there is no risk of their introducing disease and that they could be a most valuable export——

Mr. Speaker: Order. Is the hon. Member for Dorset, North (Mr. David James) asking for information?

Mr. Amery: My hon. Friend's philoprogenitive record entitles him to a special right to raise questions about the transport traditionally used by Father Christmas. However, he will appreciate that grazing land in the Falklands is limited, that we do not want too much competition for the sheep, and that the introduction of reindeer might upset the present balance of wild life. All these matters are being studied at the moment.

India

Mr. Thomas Cox: asked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with representatives of the Indian Government on matters of mutual interest.

Sir Alec Douglas-Home: I am in frequent touch with the Indian Government on a wide range of subjects of mutual interest.

Mr. Cox: I thank the right hon. Gentleman for that reply. Is he aware that at the moment appalling problems exist in certain States in India as a result of drought and food shortages? In view of our close ties with India, can the right hon. Gentleman say what aid we are offering the Indian Government as a means of minimising the problems and the human suffering that now exists?

Sir Alec Douglas-Home: We are of course in touch with the Indian Government. If the Indian Government wish to raise the question of additional aid in this context I hope that they will do so. If they do, we shall give the matter very serious consideration. As the hon. Gentleman knows, we have spent a great deal of money in Bangladesh helping with food supplies. I have not yet heard from the Indians on this matter.

Mr. Wilkinson: Will my right hon. Friend consider inviting representatives of the Indian, Bangladeshi and Pakistani

Governments to very high ministerial talks in London, in view of the urgent need to bring the three parties together to talk over their mutual differences?

Sir Alec Douglas-Home: That offer has been made. It is still open. At the moment the parties wish to talk bilaterally.

Mr. Frank Allaun: Taking up the question asked by the hon. Member for Bradford, West (Mr. Wilkinson), will the right hon. Gentleman impress upon both sides that the sensible solution to the prisoner-of-war problem is for the release of the prisoners held in India in exchange for those detained in Pakistan? Surely that is the commonsense solution to the problem.

Sir Alec Douglas-Home: The hon. Gentleman will realise that political considerations are bound up in all this. What we may regard as the sensible solution is a view not necessarily shared in all three countries in the sub-continent. Nevertheless, the exchange of civilians has begun, and I hope that it will be extended to prisoners of war.

Sir F. Bennett: Is not it a pity to try to drag in one political consideration after another? Is not it the simple fact that according to the Geneva Convention, the amendment to which was signed in 1949 by India, amongst others, all military prisoners of war should be returned to their countries of origin, irrespective of political considerations, at the termination of hostilities? Is not this 14 months overdue?

Sir Alec Douglas-Home: My hon. Friend knows that the facts are seldom as simple as they are said to be.

Ugandan Asians (Assets)

Mr. Sydney Chapman: asked the Secretary of State for Foreign and Commonwealth Affairs what is his estimate, derived from information received by officials of his Department, of the value of assets in Uganda of those Ugandan Asians at present in the United Kingdom.

Sir Alec Douglas-Home: We are continuing to record information as it is received from United Kingdom nationals, but the returned forms are not yet a sufficient proportion of those issued to allow


a useful estimate to be made of the value of assets left in Uganda.

Mr. Chapman: Will my right hon. Friend confirm that the British Government hold General Amin and his racialist régime personally responsible for the value of those assets, whatever it is? Will my right hon. Friend go a little further and say that he will refuse to treat with, or attend the same conference attended by, the Ugandan Government, unless it is on this specific matter, and then only after a change in the obscene policies of that Government?

Sir Alec Douglas-Home: We hold the Ugandan Government responsible for paying the compensation. My hon. Friend might like to know that so far more than 8,000 sets of forms have been issued by the Foreign and Commonwealth Office and the Uganda Resettlement Board, and that so far there have been about 2,200 replies. At the moment, we are pursuing with the Ugandan Government the question of compensation. I must reserve what action we take, should that approach fail, for decision later on.

Mr. Richard: The right hon. Gentleman knows that many British subjects, of Asian or United Kingdom origin, are in considerable difficulties as a result of their expulsion from Uganda. Is he able to say more about the way in which the compensation negotiations are going? Is he able to give some measure of hope to these people who have been expelled, through no fault of their own, and are in great financial straits, again through no fault of their own, that the Government will at least look sympathetically upon their difficulties?

Sir Alec Douglas-Home: Yes, we shall do that. We are trying our best to help them. It is essential that the Ugandan Government should be held responsible for compensation and, what is more, responsible in currency which is transferable. The last meeting that was held with our representatives in Kampala was on 22nd February.

Mr. George Cunningham: Is the right hon. Gentleman seriously saying that he is negotiating with the Ugandan Government to try to get compensation before he decides what retribution he will apply

if they do not pay it? Is not that a form of diplomacy which is bound to lead to failure?

Sir Alec Douglas-Home: There is a high chance that it will lead to failure, but we are bound to try. We must try to get compensation. The Government of Uganda have admitted the right to compensation, and we must try to get the actual compensation for the sake of these individuals. Other actions which may follow later may be satisfactory to some people but will not help the individual.

Greece (Mr. Richard Weeks)

Mr. Adley: asked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Greece about their refusal to allow Mr. Richard Weeks of The Firs, Downend, Bristol, to enter Greece.

Sir Alec Douglas-Home: None, Sir.

Mr. Adley: Is my right hon. Friend aware that unsubstantiated accusations against my constituent are hardly likely to commend the present Greek Government to moderate opinion in this country?

Sir Alec Douglas-Home: I have no doubt that what my hon. Friend says is true, but the Greek Government, like any other, have the right to decide whom they take into their country and whom they do not.

Dr. Miller: Is the right hon. Gentleman aware that last month I was successful in entering Greece to observe a trial there——

An Hon. Member: And successful in getting out again.

Dr. Miller: —and also successful in getting out. Is my right hon. Friend aware that during my two days there a small box of cigars which I received——

Mr. Speaker: Order. This is getting a long way from Mr. Richard Weeks.

Dr. Miller: rose——

Mr. Speaker: Order. I call the hon. Member for Middleton and Prestwich (Mr. Haselhurst) to ask the next Question.

Rhodesia

Mr. Haselhurst: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he held on the subject of Rhodesia during his African tour; and if he will make a statement.

Sir Alec Douglas-Home: I had discussions on Rhodesia in all three of the countries which I visited in West Africa. The content of these discussions must, as is customary, remain confidential.

Mr. Haselhurst: Was my right hon. Friend able to ascertain any sympathy for the point of view that in the light of likely alternatives it might be better for the Africans in Rhodesia that a settlement should be found within the course of this year on the basis of something similar to the proposals which he discussed with Mr. Smith a year ago?

Sir Alec Douglas-Home: I do not think that the African Governments would as far as that. They would like to see a settlement for the sake of the whole African continent in which the Africans could take part.

Mr. McBride: Is the right hon. Gentleman aware that Mr. Smith is reported as saying that talks are taking place between Her Majesty's Government and the Rhodesians on the Rhodesian question, as the British Government are more amenable to such discussions than their predecessors were? Can the right hon. Gentleman say whether these talks are taking place, and, if they are, what is the nature and extent of them, and who is speaking to whom?

Sir Alec Douglas-Home: I do not know about comparisons with our predecessors. Right hon. Gentlemen opposite had many discussions during their term of office. I have followed those up, so far unsuccessfully, but we are in touch with Mr. Smith. We hope that Bishop Muzorewa and the Africans can get in contact with Mr. Smith, and that as a result some proposals may come from Rhodesia. I cannot say that I am very optimistic, because one knows the history of this matter, but that is what we are doing.

Mr. Callaghan: There can be no objection to discussions with the Government of Mr. Smith, provided that the principles upon which the right hon. Gentleman has

hitherto acted are maintained. Has the right hon. Gentleman any information about the arrest of the three members of the African National Council, and does he propose to make any representations to Mr. Smith that this kind of behaviour is unlikely to encourage that council to have serious discussions with him?

Sir Alec Douglas-Home: Yes, Sir; I am doing that.

Mr. Callaghan: I thank the right hon. Gentleman.

Mr. Molloy: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement about Rhodesia.

Mr. Dykes: asked the Secretary of State for Foreign and Commonwealth Affairs what notification he has received of recent developments in Rhodesia conducive to an eventual settlement of the constitutional dispute with the Smith Government.

Mr. Maclennan: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the present position in Rhodesia.

Sir Alec Douglas-Home: There have been a number of contacts between the régime and various sectors of African opinion. In spite of difficulties reported during the last few days, it is our hope that such contacts will be pursued. But, as the House knows, we cannot directly bring about a dialogue between the races in Rhodesia. This is something which only the Rhodesians can do for themselves.

Mr. Molloy: Bearing in mind what the right hon. Gentleman said about the grave danger to Southern Africa as a whole, to which the present régime in Rhodesia is contributing, may I ask him whether he can say anything about the report of the imprisonment of Mr. Niesewand, and also the allegation that ships carrying the British flag are conveying Rhodesian chrome to the United States of America?

Sir Alec Douglas-Home: I should like to make inquiries about that and inform the hon. Gentleman of the result. I do not have the facts.
I understand that Mr. Niesewand is appealing against his detention, and


therefore nothing that I do must cross what he wants to do for himself, but I have again made representations on this matter.

Sir Robin Turton: Would it not help the situation if my right hon. Friend were to have a representative in Rhodesia so that we could get more accurate information about what is happening in Central Africa?

Sir Alec Douglas-Home: There is quite a lot to be said for my right hon. Friend's suggestion, but at the moment I do not think that it would be acceptable to Mr. Smith.

Mr. Whitehead: Mr. Ian Smith is reported to have said, before he re-opened his side of the border with Zambia, that he had received certain undertakings which made him happier. Did those undertakings come from the Government, or is this another example of Mr. Smith trying to save his own face?

Sir Alec Douglas-Home: The Government gave no undertaking. There may have been other contacts, but they are not to my knowledge.

Mr. Wall: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Rhodesia-Zambia frontier situation.

Sir Alec Douglas-Home: A confrontation on the Zambesi is not in the interests of any of the parties or countries involved. I very much hope that tension in the border area will speedily be reduced.

Mr. Wall: I do not want to get my right hon. Friend confused, but does he not agree that during the past six years Zambia has harboured armed guerrillas who have on a number of occasions invaded Rhodesia, and that this was the justification for the closure of the frontier? Does not he also agree that traffic was returning to normal until two days ago, when the Zambians kidnapped a Rhodesian engine driver?

Sir Alec Douglas-Home: The facts about the engine driver are not yet sufficiently established for me to take any action on this matter. I can only repeat that the danger of a build-up leading to a military confrontation on the Zambesi is something which we should all con-

template with horror. We must do all that we can to avoid it.

Mr. Molloy: I agree very much with what the right hon. Gentleman has said. It will be an incredibly intolerable situation if an illegal régime which has been treacherous to the British Crown and Parliament should in any way endanger a Commonwealth Government. Will the right hon. Gentleman therefore continue to do his best to ease the situation there?

Sir Alec Douglas-Home: Yes, Sir. I shall be seeing the Zambian High Commissioner tomorrow, and shall talk over the situation with him. Zambia has decided to free herself of the danger of any interference with her trade. That we can understand. But, returning to the original question, nothing could be more dangerous than an armed frontier on the Zambesi.

European Economic Community (Asian Countries)

Mr. Deakins: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make it his policy that the Declaration of Intent in the Treaty of Accession to the EEC to safeguard the interests of Asian countries should not be prejudiced as a result of the forthcoming negotiations for Association in Yaoundé III.

Mr. Amery: Yes, Sir.

Mr. Deakins: Would not the interests of Asian countries be much better protected by getting the Common Market to adopt our generalised preference scheme rather than by negotiating a series of preferential trade agreements which not only play one poor country off against another and break the rules of GATT but also strengthen protectionist sentiments in the United States?

Mr. Amery: Asian Commonwealth countries will not only benefit from the generalised preference scheme of the enlarged Community; they have an undertaking that it will be the enlarged Community's continuing objective to expand and reinforce existing trade relations and that the Community will be ready to examine problems which could arise in the future with a view to finding


a proper solution. I think that what the Community is offering is better than what the hon. Gentleman is suggesting.

Sir D. Dodds-Parker: This will be discussed in Zaire towards the end of March by the African Committee of the European Parliament. Will my right hon. Friend give guidance—which I hope hon. Gentlemen opposite will, before long, be present to support—on what the general line should be?

Mr. Amery: We shall do our best to express our views in the appropriate direction, with which I think my hon. Friend will agree.

Mr. Shore: The right hon. Gentleman must be aware that the offer of association to the African and Caribbean Commonwealth countries will, by excluding the Asian Commonwealth, have the effect of breaking up the whole Commonwealth trade system. That is one clear effect. That being so, surely the right hon. Gentleman will agree——

An Hon. Member: Nonsense.

Mr. Shore: I hear someone saying that that is nonsense, but it is a serious problem. Does the right hon. Gentleman know that the immediate effect will be to deny Indian tobacco preferential access to Britain, while at the same time maintaining a preferential market for East Africa in relation to Britain and the enlarged Community? That is one immediate practicable implication. Is the right hon. Gentleman not aware of this, and does he not agree with my hon. Friend that it would be a far better solution, not only for the Commonwealth but for world trade generally, if we had a generalised preference system rather than any special arrangement for a specialised trade agreement with the Commonwealth Asian countries?

Mr. Amery: I am sure that the right hon. Gentleman knows that none of the Asian countries concerned has expressed any desire to be associated—in the formal sense of the word—with the Community. He will appreciate—perhaps he slightly overstated the case without meaning to when he talked about the "immediate" result—that the tariff preferences will not be phased out until 1st July 1977.

Anguilla

Mr. Marten: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on future proposals for Anguilla.

Lord Balniel: I have nothing to add to my reply to my hon. Friend on 11th December.—[Vol. 849, c. 6.]

Mr. Marten: I feared that that might be the reply. Does my hon. Friend not agree that the Anguillans have now amply demonstrated their ability to maintain law and order and political stability in that island, and that no purpose is served in going on with the present situation? Could steps not be taken to bring Anguilla a new constitution more in line with the British Virgin Islands and Montserrat? Can my hon. Friend assure me that he will go out there and discuss the proposed new constitution with Mr. Webster?

Lord Balniel: It would certainly be enjoyable and interesting, and I hope that an opportunity to go out there will present itself some day. My hon. Friend is right; law and order are being maintained there. But he will recollect that on the Second Reading of the Anguilla Bill the then Minister of State promised a review of the island's status in 1974, taking into account the views of the Anguillans. We have recently written to Mr. Webster, the leader of the Anguilla Council, urging him, in the interests of all parties, to adhere to the timetable which was then set.

British Citizens Abroad (Assistance)

Mr. Dempsey: asked the Secretary of State for Foreign and Commonwealth Affairs what arrangements exist in Her Majesty's embassies abroad for giving financial assistance to British citizens in cases of emergency.

Mr. Amery: If a United Kingdom citizen is in difficulties overseas and has funds in the United Kingdom, Her Majesty's missions abroad will assist him in arranging to transfer funds.
If he has no funds immediately available Her Majesty's missions may, against an undertaking to repay, advance money fawn public funds for repatriation to the United Kingdom.

Mr. Dempsey: Is the right hon. Gentleman aware that a constituent of mine who was unavoidably stranded in Rome was refused such assistance because the embassy staff said that all they had at their disposal was voluntary funds? In those circumstances, why should not loans, which would assuredly be repaid be made to any citizens in such a distressing situation?

Mr. Amery: The Under-Secretary of State wrote to the hon. Gentleman about Mrs. Rennie, his constituent. We offered to help to transfer money rapidly through Thomas Cooks to Mrs. Rennie, but she declined the offer.

Mr. Kilfedder: What assistance—financial or otherwise—was given to Mr. Wyman, who was recently charged and found guilty of espionage in a Dublin court? Can my right hon. Friend help the House on the allegation which was made, and tell us whether he was working as a British agent, and for which Minister?

Mr. Amery: I should want notice of that question. There is, of course, no difficulty about the transfer of funds between London and Dublin.

Mr. Kaufman: Will the right hon. Gentleman ensure that I receive as soon as possible a reply to the letter I sent to the Foreign and Commonwealth Office with regard to the situation of a constituent of mine who has been swindled out of all his personal possessions in Venezuela, and on whose behalf I have written to the Foreign and Commonwealth Office asking for the intervention of the British Embassy in Caracas?

Mr. Amery: I am sorry that the hon. Gentleman has received no reply yet. I will of course do my best to expedite a reply. If the circumstances concern Caracas, the hon. Gentleman may understand that it could be a little time before we know the exact facts.

European Security and Co-operation

Mr. Sproat: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the talks at Helsinki to prepare for the Conference on Security and Co-operation in Europe.

Sir Alec Douglas-Home: The preparatory talks in Helsinki resumed on 26th February after a short break to allow for consultations in capitals. A large number of proposals have been tabled on the work which should be undertaken at the conference. They must now be examined in detail.

Mr. Sproat: Are the Russians now showing any more concrete evidence of being receptive about proposals for the greater exchange of persons and information among European countries?

Sir Alec Douglas-Home: The Russians have been co-operative in trying to frame an agenda which will allow these questions to be raised. The questions now being considered cover security, cooperation in the field of economics and the environment and the development of human contacts abroad, new cultural and educational exchanges and the wider flow of information. Under these headings I think that we will be able to raise at the conference what subjects we wish.

Mr. George Cunningham: Is not this conference an example of something being kept going for no good purpose? Will the right hon. Gentleman say how much money and time has been devoted by officials to the so-called preparations for the conference which is to follow this one?

Sir Alec Douglas-Home: Not without notice. This conference could be worthwhile. It will, incidentally, be the first time that members of the Warsaw Pact and of NATO, plus non-aligned countries, have met on one platform. That is something. We do not want general declarations of intention to live together in peace—we have got beyond that. We want to develop certain areas where Eastern Europe and Western Europe can identify mutual advantage and perhaps exploit it. I think that it will be worth-while.

Passports

Miss Fookes: asked the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to end the issue of family passports.

Mr. Amery: No, Sir. There remains a considerable demand for the family, passport.

Miss Fookes: May I remind my right hon. Friend that Queen Victoria is dead? Is it not about time that a system was ended whereby the husband but not the wife may travel alone on the passport?

Mr. Amery: Although Queen Victoria is dead, we still have families.

Mr. William Hamilton: The right hon. Gentleman should not treat this question so frivolously. There is a serious anomaly here. So long as these family passports are issued they should be freely usable by each person whose name is on the passport. It is humiliating to the wife if the passport is in joint names. Will he undertake to consider that aspect of the problem?

Mr. Amery: I take the point, but the hon. Gentleman will realise that the limitation at present in force is based on recommendations of an international conference held in 1926. The countries concerned accepted the recommendations. Any change in our practice could be made only after consultation with the other countries. The hon. Gentleman will appreciate that it would not be worth while issuing a passport which was not accepted by recipient countries.

Mr. Deedes: Will my right hon. Friend undertake to reconsider this matter? Quite apart from the consideration which my hon. Friend the Member for Merton and Morden (Miss Fookes) has in mind, is my right hon. Friend aware that the family passport gives rise to considerable difficulty and abuses in relation to immigration control? For that reason alone, it should be looked at again.

Mr. Amery: But it is also very much cheaper, and a high proportion of families going abroad for their holidays take advantage of this facility.

Mr. Callaghan: Is the right hon. Gentleman aware that his replies are both frivolous and irrelevant and, I imagine, command no support anywhere? Would he please take note of the view of the House that, clearly, a convention of 1926 ought to be reviewed by now, that he should initiate the review and report to the House quickly with his recommendations, after an unprejudiced study of the situation?

Mr. Amery: The right hon. Gentleman's proposal would involve doubling the cost of passports for families taking annual holidays abroad.

Mr. Callaghan: May I press the Minister on this? He is putting up a series of defensive answers. Is it not possible for a family to choose whether they will pay the new cost or stick to the original passport? Let the right hon. Gentleman show a little flexibility, and have a decent review of this situation.

Mr. Amery: I really cannot see what the right hon. Gentleman is talking about. There is every flexibility. No one is saying that the family must have a family passport. It is only that they are given a cheap passport if they take a family passport. They can always have a separate passport for the husband and for the wife.

Mr. Deedes: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Russian Embassy, London (Representation)

Mr. McCrindle: asked the Secretary of State for Foreign and Commonwealth Affairs what is the present level of the trade and similar representation at the Russian Embassy in London; and how this compares with similar representation in February 1970.

Mr. Amery: There are 44 permanent officials at the Soviet trade delegation, which is separate from the embassy, and 93 in other organisations, mostly of a commercial kind.
The comparable figures in February 1970 were 66 and 102 respectively.

Mr. McCrindle: Has my right hon. Friend conveyed to the Soviet Union our pleasure at the improved relations both in diplomatic matters and in a trade sense? Has he further conveyed our feeling that those relations would be put in jeopardy if there were to be a repetition of the over-staffing of the Russian Embassy, which might lead to a repetition of the events of November 1971?

Mr. Amery: My hon. Friend will accept that the facts speak for themselves.


Our exports to the Soviet Union have risen from £89 million to £90 million worth and our imports from £205 million to £227 million worth. So clearly our trade has not be adversely affected; it has somewhat improved.

Uganda

Mr. George Cunningham: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will take the initiative in proposing to other Commonwealth Governments that Uganda should be suspended from Commonwealth membership; and what the result is of the review of general policy towards Uganda which he undertook to conduct.

Sir Alec Douglas-Home: I announced the result of our review of policy towards Uganda in the House on 30th November and amplified this on 19th December. At present we are concentrating on the question of compensation for the United Kingdom passport holders and British subjects who have been evicted.
There are clearly a number of possible courses of action with regard to Uganda which may be open to us. The proper place to discuss Uganda relations with the Commonwealth would be at the Commonwealth Prime Ministers' meeting in August.

Mr. Cunningham: Will the Foreign Secretary accept my apologies for having missed the results of his grand review of policy? Will he say whether he is not considering the termination of Commonwealth preferences immediately, and not waiting for the EEC arrangements to take effect? If we are to exercise any pressure upon Amin, does not he agree that we must make clear what consequences will follow on our part? Would not he agree that it is essential, before the Commonwealth Conference, to say that for our part we draw the line at Amin and that other Commonwealth countries should do the same? Have we taken soundings of other Commonwealth Governments to that end?

Sir Alec Douglas-Home: The hon. Gentleman did not miss this; I remember his commenting on it. We ended all aid to Uganda. Now we are looking at the question of compensation for the sake of individuals. I remind the hon. Gentleman that individuals suffered terrible

hardship. We must try to get compensation out of the Ugandan Government.
The question of expelling a member from the Commonwealth—if that is what is in the hon. Gentleman's mind—must be discussed by the Heads of the Governments of the Commonwealth when they are assembled.

Mr. Sydney Chapman: Is it not simply a matter of principle that if the Commonwealth means anything the British Government ought to take the lead in trying to expel Uganda so long as it practises its racialist and obscene policies?

Sir Alec Douglas-Home: Certain conventions and principles guide members of the Commonwealth, and they have to be discussed in the proper forum. Certainly one member cannot take an initiative in expelling another. The proper time to discuss this is undoubtedly when the Commonwealth Prime Ministers meet.

Mr. Callaghan: There will be a lot of support, despite the emotion, for the right hon. Gentleman's caution in this matter. Is there not a great difference between a country like, for example, South Africa—where the people had a chance of expressing their views in a very limited sense when the decision to leave the Commonwealth was taken—and the position of the people of Uganda, who have had no opportunity of expressing a view?
Whilst obviously it is right that we should take all action to recover compensation and on other matters, membership of the Commonwealth is a very important thing, and the actions of a single individual unsupported by his people should be thought about very carefully before we take such a decision.

Sir Alec Douglas-Home: I am obliged to the right hon. Gentleman. What he says is true. Our relations with Uganda were very close, and the people were and still are very friendly. We should not move with haste in this matter.

Dependent Commonwealth Territories (Finance)

Sir D. Dodds-Parker: asked the Secretary of State for Foreign and Commonwealth Affairs what action is being taken to ensure that dependent territories of the Commonwealth, which are


outside the new sterling area and have not their own currency, have adequate provision for internal and external finance.

Lord Balniel: Territories within this category already have adequate provision for these purposes and no action is required by Her Majesty's Government.

Sir D. Dodds-Parker: What help will be given to the dependent territories using the currency of others if they are adversely affected by any moves in the floating of sterling?

Lord Balniel: If one of these countries is adversely affected by rate fluctuations of that kind it would certainly be one of the factors that we should take into account in determining the appropriate level of aid to the individual territory.

Pacific Islands (Constitution)

Mr. Frederick Lee: asked the Secretary of State for Foreign and Commonwealth Affairs what progress is being made towards constitutional reform in the Solomons, the Gilbert and Ellice Islands and the Condominium of the New Hebrides.

Lord Balniel: I would refer the hon. Member to what my hon. Friend the Under-Secretary told the House on 27th November and 11th December. In December the Legislative Council of the Gilbert and Ellice Island set up a Select Committee to make recommendations for constitutional changes there.—[Vol. 847 c. 14–15, 518–19; Vol. 848 c. 4–5.]

Mr. Lee: While obviously the need for economic aid will be with us for a very long time, now that we see the great changes coming in Papua and Guinea, could it not well be that the need to expedite constitutional change, especially in the Solomons, has arrived?

Lord Balniel: I am sure that there is a great deal of validity in the point the right hon. Gentleman is making. He will know that the Select Committee on the Constitution of the Solomon Islands has made proposals. It is not, however, for Her Majesty's Government to consider or to comment on the Committee's proposals at this stage. In due

course, after the election, a new governing council will decide what recommendations to convey to the High Commissioner, and we shall consider them at that stage.

European Defence (United States Participation)

Mr. Judd: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has held with NATO and EEC partners concerning the future of the United States military presence in Europe.

Mr. Frank Allaun: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has held with NATO and EEC partners concerning the future of the United States military presence in Europe.

Mr. Amery: The content of ministerial discussions is of course confidential. But I would refer the hon. Gentlemen to the communiqué published after the NATO Ministerial Meeting in Brussels last December.
In this the United States reaffirmed that, given a similar approach by other countries of the Alliance, the United States would maintain and improve their forces in Europe. They would not reduce them unless there was reciprocal action by the other side.

Mr. Judd: Will the Minister take every possible opportunity of emphasising that the British Government have their faces firmly set against the principle of an emergence of an independent Western European defence system, perhaps with its own Western European independent deterrent?

Mr. Amery: I am glad to register the hon. Gentleman's support for a continuing American presence in Europe.

Mr. Marten: Does my right hon. Friend agree that the attitude which the Common Market countries take towards America in the forthcoming GATT negotiations and, indeed, in relation to America's problems generally, could have a very serious effect upon the American defence presence in Europe?

Mr. Amery: I would draw my hon. Friend's attention to the statement by Mr. Secretary Rogers at a Press conference on 15th February when he was asked


about a possible connection between trade and monetary matters on the one hand and the maintenance of American troops in Europe on the other. He replied. "There is no linkage between the two".

Mr. Allaun: Does not the American Congress proposal for a withdrawal of troops from Europe present a great opportunity for pressing for the withdrawal of all foreign troops from Europe, including Soviet troops from Eastern Europe and BAOR from Germany? Is this not infinitely preferable to the Government policy of opposing the American proposal and having instead a joint nuclear force, or to an increasing burden on existing European countries, or to having a build-up instead of a reduction of world forces, thereby increasing the arms race?

Mr. Amery: I do not know of any contradiction between American and European policy in this matter. Soviet defence expenditure has increased by 5 per cent. in each of the last five years, whereas Western expenditure has remained static. Our moderate increase this year is mainly in respect of wages and salaries, and not of equipment.
I read, of course, with care—as I always do—the hon. Member's contribution to The Times this morning, but he will appreciate that the kind of reduction he proposed would make us more dependent on a nuclear response and not less.

Mr. Wilkinson: Will the Minister remind our European allies of the importance of maintaining Europe's naval strength, particularly in a fairly fluid political situation from which force level reductions on the mainland of Europe may ensue?

Mr. Amery: It is essential that all of us in Europe should maintain and, to some extent, increase our contribution to defence. It is only natural that as we grow more prosperous as a result of the European Community we should carry a larger share of the defence burden.

Mr. Jay: Is there not a real danger that if the EEC continues to be too negative towards the United States' proposals for liberalising trade, the United States' views on defence might begin to change?

Mr. Amery: That is not my impression. It is certainly not what Mr. Secretary Rogers said in the Press conference to which I referred.

Developing Nations

Mr. Pavitt: asked the Secretary of State for Foreign and Commonwealth Affairs if he will give additional technical assistance to assist in the financing of the required infrastructure of co-operatives as recommended in the resolution adopted at the UNCTAD session on 15th May 1972; and if he will make a statement.

The Minister for Overseas Development (Mr. Richard Wood): British aid to co-operatives is already substantial. In addition to technical assistance, capital is provided to help establish new co-operatives. We are, for example, contributing £7 millions towards the cost of the fertiliser complex at Kandla which will be run by the Indian Farmers' Fertiliser Co-operative.

Mr. Pavitt: Does the acceptance of the resolution represent any change of balance for a greater proportion of aid to go to this type of infrastrucure financing? Although I do not expect the Minister to give me an off-the-cuff answer, will he give me in writing a breakdown of the way in which, after the passing of the resolution, there have been policy changes?

Mr. Wood: I will certainly do that.

Mr. Douglas-Mann: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will give an assurance that in the discussions about a common EEC policy on development cooperation he will seek to ensure that all developing countries are treated on the basis of their needs.

Mr. Wood: Yes, Sir. We aim to encourage the wider acceptance of the general principle that both the distribution and the terms of aid should be related primarily to the needs of individual developing countries. We also recognise the importance of trade and are discussing with our partners ways of improving these countries' export opportunities.

Mr. Douglas-Mann: I appreciate the Minister's reply. Will he take note of the


fact that because a country is an ex-colony or an ex-member of the Commonwealth it does not necessarily indicate that it is in need of assistance? Is he aware that the test of whether Europe will be an inward-looking or an outward-looking organisation will be in its approach to assistance to developing countries. Is he aware that the continuance of the Yaoundé pattern is unlikely to be encouraging if that is what is contemplated?

Mr. Wood: I think my agreement to the hon. Member's proposition was implicit in the answer that I gave. Certainly, however, we recognise a need to achieve a balance between the two objectives contained in the communiqué of the Summit last October, one of which spoke of the advantages enjoyed by countries with which the Community has special relations and the other of the need to fulfil the expectations of all developing countries.

Mr. Body: Does the Minister agree that there is growing concern among developing countries about the list of excluded commodities in the Yaoundé Convention, and is there any hope that the Government will take the lead in shortening that list?

Mr. Wood: These matters will all be discussed when the negotiations begin, which will be shortly.

Mr. Callaghan: Is there any prospect of reviewing the servicing of debt by the developing countries, which seems to be eating up more and more of the aid that is being voted every year?

Mr. Wood: That is an immensely important question. We intend to take every opportunity to discuss both remedial and preventive measures to try to avoid these problems getting completely out of control.

Sudan

Mr. Luce: asked the Secretary of State for Foreign and Commonwealth Affairs whether Great Britain will provide further aid to the Sudan following the conclusion of its civil war in the South.

Mr. Wood: I have decided to make a further payment of £250,000 to the South Sudan relief appeal by the United Nations High Commissioner for Refugees. I have

also decided to provide £50,000 to be shared among British voluntary societies which have been working for the past 12 months in the south. Parliament will be asked to approve the necessary Supplementary Estimates. Meanwhile, an advance will be sought from the Contingency Fund. The total grants made by Her Majesty's Government for relief work in South Sudan will now be £750,000.

Mr. Luce: I am grateful to my right hon. Friend for that statement, but is he aware that this is the first anniversary of the peace settlement in the south and that we have strong historical ties with the Sudan? This announcement of further aid, albeit a relatively small sum, will he warmly welcomed by the Sudanese in the south and in the north. But the greatest need is for a sustained flow of cash aid and technical assistance over a long period in the south. Will the Minister ask our allies, particularly in the EEC, to respond to our lead in this?

Mr. Wood: All this will be taken into account. My hon. Friend the Under-Secretary will be in Khartoum, and later Juba, tomorrow, and will no doubt be considering the matter. As my hon. Friend knows, there is the likelihood of further discussions later this month.

Mr. James Johnson: I thank the Minister for his announcement about the aid. Is he aware that after 16 years of civil war this is the most magnanimous settlement of any civil war I have known anywhere in the world, and is perhaps an example to us nearer home. But is the Minister further aware that about half a million refugees are due soon, before the wet season, from Uganda and the Congo and what is now needed is cash to set in motion public works of all kinds for the unemployed and under-employed who are coming back? Will the Minister consider a further sum in the near future?

Mr. Wood: It was for that kind of reason that I decided to make this further contribution. I will certainly take into account what the hon. Member has said.

New Hebrides (Aid)

Mr. Dalyell: asked the Secretary of State for Foreign and Commonwealth Affairs what aid is being given in the current year to the New Hebrides.

Mr. Wood: British aid to the New Hebrides in the present financial year will be about £2·3 millions.

Mr. Dalyell: What measures are we taking to offer technical help to the Pacific Islands to alleviate the effects of pollution as a result of the French nuclear tests?

Mr. Wood: Whatever explosions do or do not take place in the Pacific Ocean, there will be a considerable need by islands like the New Hebrides for aid of all kinds, which is what we are trying to provide.

Mr. Frederick Lee: Is it the case that when we increase aid to the New Hebrides the French do the same in proportion?

Mr. Wood: I do not have the details of the aid given by the French but I believe that it is considerable.

Sir F. Bennett: We all deplore the French tests that took place, but is there any evidence that pollution has affected the economy of any of these islands?

Mr. Wood: I cannot give that information in aswer to this Question, which is about aid for the present year to the New Hebrides.

Oral Answers to Questions — ENVIRONMENT

Concessionary Fares

Mr. Roy Hughes: asked the Secretary of State for the Environment how many representations he has received about the proposal to introduce concessionary fares on public transport for young people under the age of 16 years.

The Under-Secretary of State for the Environment (Mr. Keith Speed): Thirty-four since January 1972, including one petition.

Mr. Hughes: Does not the Minister feel that it is time that this matter was given more serious attention? The concession was originally given for children at school, but subsequently the school leaving age was raised to 16? Will the Minister have consultations with the transport authorities with a view to issu-

ing guidance about giving the concession at the age of 16?

Mr. Speed: Concessionary fares for children must be a matter for the commercial judgment of the operators. As for schoolchildren travelling to school, my right hon. Friend the Secretary of State for Education has a working party considering this question at the moment.

Ports (Rochdale Report)

Mr. David Price: asked the Secretary of State for the Environment what plans he has to implement the two recommendations in paragraph 109 of the recommendations of the Report of the Committee of Inquiry into the Major Ports of Great Britain (Command Paper No. 1824, published in September 1962) about the improvement of communications betwen Southampton and the Midlands and Southampton and the West, respectively.

Mr. Speed: Road schemes now in preparation or under construction will substantially improve these communications. A study into the need for improvement to the Bristol-Southampton route will be completed next week. The future improvement of rail services is a matter for the British Railways Board.

Mr. Price: In view of the development of the port of Southampton as a container port, will my hon. Friend bear in mind that the improvement of road links between Southampton and the Midlands is not only right in itself but could contribute to the easing of the road problems around the north of Greater London?

Mr. Speed: As a Midlands Member I echo those sentiments. The Abingdon bypass is being constructed, and by the early 1980s, subject to the statutory procedures, there will be a first-class trunk route from Southampton to Birmingham.

Mr. R. C. Mitchell: The Minister said that the improvement of rail communications was a matter for the British Railways Board. Is that good enough? Surely we should have a properly co-ordinated Government transport policy in which Ministers are concerned with both road and rail development. The Minister himself should have views on what constitutes proper rail development around Southampton.

Mr. Speed: My right hon. Friend the Minister for Transport Industries and I are looking at the whole question of British Rail. My right hon. Friend has assured the House that it and the public will be taken into our confidence as soon as possible.

Mr. S. James A. Hill: Does my hon. Friend agree that every encouragement should be given to British Rail to increase its services to Southampton, as it seems to be taking quite the opposite view? Could not the date of the opening of the roadway to the Midlands be advanced? The present situation is causing severe traffic congestion for juggernauts.

Mr. Speed: There are proceedings to go through. Many people object to the construction of such roads. They must have their say, and proper inquiries must be undertaken.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 16th MARCH

Members successful in the Ballot were:

Mr. Tom Pendry.

Mr. John Page.

Mr. Carol Mather.

BILL PRESENTED

ALKALI INSPECTORATE

Mr. Neil McBride, supported by Mr. Alan Williams, Mr. George Thomas, Dr. John Cunningham, Mr. Anthony Crosland, Mr. Roy Hughes, Mr. John Morris, Mr. Donald Coleman, Mr. Frank Allaun, Mr. Stanley Orme, Mr. Eric S. Heffer and Mr. Brian Walden presented a Bill to increase the powers of the Alkali Inspectorate in cities in order to reduce or eliminate the emission of all waste or toxic gases which pollute the atmosphere; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11th May and to be printed. [Bill 81.]

PUBLIC OPINION POLLS (DISCLOSURE) BILL

3.33 p.m.

Mr. Dick Douglas: I beg to move,
That leave be given to bring in a Bill to regulate the publication of public opinion polls to ensure a fair and balanced presentation.
Finding fault with the predictions of public opinion polls is a never-out-of-season sport with politicians. We have a tendency to accept their analysis when they show us or our party in a good light. The reverse tends to be the case when they are critical of our stated positions.
The Bill is partly motivated by an examination of the report on public opinion polling in the 1970 General Election produced by the Market Research Society of Great Britain, but more importantly from my own understanding of survey techniques, I realise that although organisations aspire to objectivity in the construction of the questionnaires and the structuring of the survey it is all too easy to get things wrong.
Realising that they are subject to criticism, five of the leading companies that engaged in polling in May 1970 compiled an agreed code of practice. [Interruption.]

Mr. Speaker: Order. I wish that hon. Members who want to conduct conversations would do so outside the Chamber.

Mr. Douglas: So far as it goes, the code of practice is adequate, allowing in particular that the organisations
will on request make available to a reasonable number of journalists, academics, students, other polling organisations and the political parties
a substantial amount of information in addition to that which is normally published.
However, a fair and balanced publication of polling results is a matter of concern not only to the pollsters but to the mass media. Both Press and television are equally prone to give statistics about polling results without bothering to quote the questions or give information about the sample size or the number of respondents. There was a glaring

example last week, when the media dealt with the results of a poll conducted for the Law Society by Market and Opinion Research International. The media should have had enough responsibility at least extending to stating in their reports of the results of the poll the question and the number of respondents.
The Bill, while endorsing that all the background sources of information and questions should be made available, would also seek to obtain details of the sponsorship of polls and, where appropriate, the cost of a poll. Sponsoring organisations sometimes have the public benefit in mind, but more often they who pay for the polls can so structure a questionnaire as to obtain the responses they desire. Reputable polling organisations can and do insist on balancing the questionnaire, but more often than not it will be the sponsor's slanted question that obtains the headlines.
In the immediate pre-election period it is very important to create an independent committee with the task of inquiring into the accuracy and meaning of polls. Judging by the Market Research Society's report, the committee should be acceptable to the pollsters. Therefore, I hope that such a committee can be established before legislation is passed.
We who admire the United Kingdom practice recognise that the absence of a fixed election date gives added weight to the peculiar alchemy of opinion polls. Some of us realise that to ban such polls would create more difficulties than it would provide solutions.
The Bill is not aimed at those who wish to conduct a poll and to keep the contents for their private use. It is aimed at halting the selective disclosure of opinion poll results, including the results of polls conducted for purposes other than political.
The Bill is an attempt to request that more light be shone on a subject that is important to the working of our democratic process. I trust that the House will give me permission to introduce it.

Question put and agreed to.

Bill ordered to be brought in by Mr. Dick Douglas, Mr. William Hamilton, Mr. Hugh D. Brown, Mr. Tam Dalyell, Dr. J. Dickson Mabon, Mr. John Roper and Mr. John Prescott.

PUBLIC OPINION POLLS (DISCLOSURE)

Bill to regulate the publication of public opinion polls to ensure a fair and balanced presentation presented accordingly, and read the First time; to be read a Second time upon Friday 18th May and to be printed. [Bill 80.]

Orders of the Day — COUNTER-INFLATION BILL

As amended (in the Standing Committee), further considered.

Clause 4

DURATION AND REACTIVATION OF PART II

Mr. Speaker: Before I call the first amendment I should like to clear up the position with regard to Amendment No. 59, in page 3, line 37 at end insert
'being a period ending not later than 31st March 1976'.
The subject matter of that amendment can be discussed with Government Amendment No. 3. If the Government amendment is agreed to, that amendment falls. Therefore, I shall select it only if the Government amendment is defeated, but it can be discussed with the Government amendment.

Mr. J. Bruce-Gardyne: I am most grateful for that elucidation, Mr. Speaker, but may I get the position clear? As I understand it, if Government Amendments Nos. 3 and 58 are selected we are faced with two alternative propositions—either the proposition in the Bill as it stands, that the power given shall be renewable by order on an annual basis indefinitely, or the proposition arising from a combination of the Government amendments, that the powers shall last for three years and then stop, unless terminated during that period. We shall not have before us, I understand, the third choice, which it is the purpose of my amendment to introduce, that the powers should last for a maximum of three years but that within those three years there should be annual renewability by Order in Council. In other words, that would give the best of both worlds.

Mr. Speaker: This is a matter of argument, and I have nothing to add to my ruling at this stage. I shall call Government Amendment No. 3, with which can be discussed Government Amendments Nos. 58 and 16 and Amendment No. 59. Then we shall see how we get on.

3.40 p.m.

The Secretary of State for Employment (Mr. Maurice Macmillan): I beg to move Amendment No. 3, in page 3, line 34, leave out 'one year' and insert 'three years'.
I thank you for your ruling, Mr. Speaker. I think it is for the convenience of the House to discuss with this, and Amendment No. 59, the following amendments:
No. 58, in page 3, line 36, leave out subsections (2) to (5) and insert—
'(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.
(3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.
(4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.'
No. 16, in page 17, line 16, leave out Clause 19.
Amendment No. 58 is complementary to Amendment No. 3 and replaces subsections (2) and (5) of Clause 4 with the version on the Order Paper. Amendment No. 59 is an alternative to the two Government amendments. Amendment No. 16 seeks to delete Clause 19. I should point out to the House that part of the substance of Clause 19 is affected by later amendments to Clauses 12 and 13, which seek to limit the operation of Clause 12 to the duration of Part II of the Bill and the operation of Clause 13 to one year. If the amendments are agreed by the House, Clause 19 will be concerned only with Part I of the Bill. What arises will, in effect, be the continuation of the agencies as a framework for a possible voluntary policy.
I do not want to dwell on this point, as the arguments for retaining Part I of the Bill are part of my argument for retaining the statutory powers of Part II for a potential period of three years, but, as now drafted on the Order Paper, not renewable thereafter except by fresh legislation, and for retaining the power within that three-year period to stop the statutory powers of Part II and reactivate them by order subject to approval in draft by the House.
In Committee considerable concern was expressed during the debates on

Clause 4 and on other clauses, about the accountability of the agencies and of Ministers to Parliament. That concern about accountability to Parliament for the powers which we are seeking to operate for a statutory policy, and which are either contained in or made operable by Part II of the Bill, was shared by the Government.
That concern was indicated by the undertakings given in Committee by my hon. Friends and myself, most of which were embodied in amendments on the Order Paper which we shall be discussing later today. I shall remind the House about those undertakings as they are relevant to the discussion upon which we have embarked. The existing powers which are derived from paragraph (4) of Schedule 2 are reinforced by the requirement which is set out later to publish notices and consents as well as orders by Ministers and by the agencies. That was in response to the suggestion, which was a perfectly reasonable one, that it is difficult to question Ministers if those who wish to do so do not have the means of obtaining information.
In addition, there was the undertaking to arrange for the publication of quarterly reports by the agencies within 30 days. It was undertaken that these should be drafted within 30 days and put in the hands of Ministers within 30 days of the end of the quarter, and that they should be debateable in the House. There is also the undertaking which I gave to debate in draft any new code or any substantial addition or alteration to a code set up under the Bill. I warned the Committee that it would be unlikely that we should draft it in terms which would include it in the Bill because of the difficulty of identifying what would or would not be a substantial addition or alteration to a code.
I repeat the undertakings which I gave in Committee that the Government will ensure that any new code or any substantial addition or alteration to the code should be debated in draft by this House, as is happening on this occasion. Not only are we debating the consultative document, but we can debate the draft of it from which it is derived. Further concern was expressed in Committee about the duration of the statutory powers in Part II.

Mr. John Biffen: Before my right hon. Friend passes from the elaboration of the code so that it may be adapted to the changing character of the policy itself, it probably would be helpful for the House during Report to have it made clear that in the autumn stage 3 will be accompanied by a new code rather than by the agencies being told by Ministers to take a somewhat different interpretation of the code from that which they have been taking hitherto.

Mr. Macmillan: I assure my hon. Friend that it is intended that stage 3 shall be governed by a new code. I am not saying that parts of it will not be familiar or the same as the existing code. The intention is, however, that it should be accompanied by a new code setting out the criteria for stage 3. I cannot give an undertaking now that there will be a consultative document, but of course there can be debates on the reports of the agencies and the conduct of stage 2.
Further concern was expressed about the duration of the statutory powers in Part II, especially the power to continue indefinitely by order Part II and to reactivate Part II once it had been put into suspension by Order in Council. I indicated in Committee that I would seek during Report to insert again the powers which the Committee removed from the Bill. I also said that I and the Government attached great importance to the initial three-year period and the ability to switch on and off again. The powers of Part II switch off by Order in Council, and they are switched on subject to a draft order being approved by the House.
I still attach great importance to these considerations. However, on reflection the Government have taken the view that there is no need to have the ability to extend the operation of Part II beyond the initial three years. If any statutory powers are still required then, in practice the situation might well require a different type of legislation. Although originally the Government thought that parliamentary control would be met by a full day's debate on a draft order, subject to an affirmative resolution when made, we now accept that new legislation will be appropriate, if there is any such requirement. So the new version of Clause 4, which I am proposing to insert by Amend-

ment No. 3 and Amendment No. 58, recognises the situation. I hope that it allays the fears expressed by some of my hon. Friends and others about the duration of these powers.
The Government have throughout made two things clear. First, we are not seeking a confrontation with the trade unions. We are willing to reach agreement with them and with the employers on a voluntary policy for controlling inflation, provided that such a policy can be fully effective. We are willing to do this as soon as it seems possible. But, secondly, we have also made it clear that until such an effective voluntary policy can be agreed, we are determined to stand firm on our present policy through the operation of the Bill during phase 2 and phase 3.
It is for these reasons that I ask the House, first, to restore the initial three-year period for Part II of the Bill; secondly, to maintain the capacity to stop the powers by simple Order in Council; and, thirdly, to restore the ability to reactivate them, if once they have been stopped within the three-year period, by order, which again would be placed in draft form before the House and be subject to affirmative resolution.
By Amendment No. 3 and Amendment No. 58, Part II of the Bill would operate for the initial three years without an annual order to keep it going. Otherwise these debates would have to take place effectively in March 1974 and again in March 1975. I am seeking to make Part II operate for the initial three years without the need for such an annual order, but only for those three years, ending definitely on 31st March 1976. So, the Clause 4 arrangements, with the powers in Part II, can be stopped and, if necessary, restored as I have described.
I believe that this process is necessary in order to make our two points clear—our determination to stand firm on our policy and our willingness to agree an effective voluntary policy as soon as that is possible. I am sure that many members of trade unions, as well as my hon. Friends and others outside the House, would prefer a voluntary system. That is why I see the necessity to keep the capacity to switch off the statutory powers of Part II. But I hope that we have all learnt the lesson of the past—the fact that


voluntary policies and declarations of intent have frequently ended in an ineffective control of inflation. So I think that it is necessary to keep the power to switch on and return to the statutory powers of Part II, subject to parliamentary approval by draft order. I hope, too, that, remembering the lessons of 1968, 1969 and 1970, the House will agree to show the country that the Government and the House will carry through the necessary policies.
That is the reason why I cannot accept Amendment No. 59. I agree that it, too, would limit Part II to three years, but it would make it subject to annual affirmative resolution. I believe that that would demonstrate to the country not so much our concern for parliamentary control as fears for the success of our policy and lack of will by the Conservative Party in supporting a firm stance by the Government. I believe those of my hon. Friends and others outside the House who tell me that the country expects the Government to stand firm. But I am also convinced that the firm stance they are demanding requires a base of a firm three years to be effective and to be seen by all concerned to be effective. That is why I ask the House to reject Amendment No. 59 and support the Government amendments.

Mr. Bruce-Gardyne: Before he sits down, will my right hon. Friend deal with one important point? He said that to have annual renewability by order might be interpreted as showing a lack of will. Would he argue that the fact that we have, for instance, annual renewability by order of the Rhodesian sanctions has shown lack of will?

Mr. Macmillan: I want to avoid being too derogatory, but the circumstances in which we find ourselves, where there is, if not an organised movement, then at least a clear determination on the part of a number of people within the trade union movement to use industrial action because of their dislike—I put it no higher—of the Government's policy, create an entirely different situation in which a three-year period is required to give a firm demonstration of the will not only of the Government but of the Conservative Party in backing the Government.

Mr. Anthony Wedgwood Benn: I suppose that after some of the recent speeches by Ministers the Secretary of State's reference to his desire to get an understanding with the trade union movement should be welcomed. But the amendment is very much more important than the right hon. Gentleman seems to realise. In the Bill the Government originally proposed three years plus annual renewals in perpetuity. Indeed, the Bill provided that members of the Pay Board and the Price Commission could remain in office for five years, renewable by a further five years. This indicated that the Government's original intention was that this legislation should be permanent. Then, in Committee, as a result of the efforts by the hon. Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley), the proposal for three years plus one, plus one renewal, was replaced by one year plus one, plus one renewal.
The Government now say that they want three years with a definite stop. Indeed, they say that they might go even further and stop before the three years period is up, in which case they could renew one plus one up to three but would then stop. This is evidence of the Government's determination to stand firm, we are told.
The proposal to some extent cuts across party lines—one of the few occasions on this measure when that happens. What we are discussing is the proper time and place for parliamentary intervention in a new departure of policy in the relationships between Government and industry. I want now to put our reasons why, if we have to have this Bill, the process should be on a one plus one basis.
First, the Bill represents a total reversal of the Government's original policy. When I heard the right hon. Gentleman say how important it was for the Government to stand firm, I could not but remember that the Prime Minister in 1970 warned the nation that the Conservative Government would not vary their policy. I therefore have some doubts whether this or any other current Government policy has the permanence that the right hon. Gentleman hopes for.
Secondly, there is not only no mandate for the Government's present policy but, in so far as the public voted for the


Conservatives believing them to be against a statutory prices and incomes policy, there is a positive mandate against it.
The third reason why Parliament should intervene more regularly in the consideration of the policy is that the Government have reached a very solemn judgment about the mixed enterprise system which is in many ways the most important part of the Bill. They have concluded that we cannot rely upon a mixed enterprise economy to produce the necessary social and economic results.
4.0 p.m.
Coupled with that, the Bill introduces methods of control the effects of which upon industry are wholly unknown. Anyone trying to read the pay and prices code, which we shall be debating on Monday, must recognise that this code will introduce a high degree of uncertainty into business planning on the management side. First, it is an advisory code. It has no statutory backing. Second, we do not know for how long phase 2 will last. Sometimes it is pushed back to the autumn, sometimes, under the pressure of industrial unrest, it is brought forward to July.
We do not know the length of phase 2. We do not know whether it will be a statutory or voluntary phase. We do not know whether the Price Commission and Pay Board will be two separate bodies in the autumn or the summer or one body under another provision of the Bill. We do not know what interventions there will be. We do not know, and nor does management, whether the attitude of the Government towards profits is still that profits are to be the main engine for investment or whether profits are, as we on this side have often been accused of saying, something slightly immoral to be kept back, at any rate during the period when statutory wage control is in effect.
We do not know, with insurance for example—to take yesterday's amendment, which is highly relevant—the extent to which the Government are serious in moving into a large area of business enterprise with a view to keeping premiums up for profitability and down for counter-inflationary purposes. This is a wholly experimental policy. Where we have such a policy there is an overwhelming case for regular parliamentary scrutiny, review and even fresh legislation.
The second area into which the Bill moves is that of industrial relations. I do not have to stress to the House, nor even to the Minister, who may have been affected in his Department by yesterday's dispute, the effects of this legislation on industrial relations. What is important about the Bill, and what will be seen to be even more important in the months ahead, is that whereas up to now industrial relations have been a subject in which the Minister had a direct responsibility, this Bill pushes the conflict into one between a union and an appointed Pay Board with no direct ministerial responsibility.
If we exclude from those engaged in industrial negotiations both the possibility that their argument may be settled by collective bargaining and the possibility of hon. Members raising their case in the House, then we are diverting the greatest argument in British economic policy at the moment away from Parliament into an appointed agency. These are other reasons why there should be regular parliamentary scrutiny of and debate on this policy whatever view may be taken of it.
I go further and say that in the excellent debates we had in Committee—and, speaking personally, I found it the most interesting Committee of which I have ever been a member—a number of different views began to emerge. There was the Government view, joined very largely by the Liberal Party, the post-capitalist party as the hon. Member for Cornwall, North (Mr. Pardoe) described it—[Interruption.] The Government are post-capitalist in the sense that they no longer believe in free enterprise as the means of solving these problems. There was the Government and the Liberal view emerging strongly, very much united, as one would expect. Then there were the monetarists, the school of economics from Oswestry and Cirencester and Tewkesbury, taking the view which was the view on which the Government were elected and therefore highly respectable in its ancestry, that the Government should stick to their programme and beliefs and let these forces work their way out.
Today the Labour movement has published its own view about tackling inflation. This view, a joint statement from the Labour Party and the TUC, represents a third alternative solution to these problems. If this measure remains on the


statute book in such a way as to exclude effective parliamentary debate among these three views then we are heading for trouble. Why? Because we are diverting one of the central conflicts in our society outside Parliament, to be resolved by agencies dealing directly on the one hand with trade unions and on the other with business.
This is the danger to the House of Commons. Whatever one may think about the rôle of Parliament and its relative success in handling economic problems—and there are many who have doubts about our capacity to solve these problems—at any rate we do debate and discuss them here. We decide them here. The question that has been very much in the headlines recently, "Who Governs Britain?" is what this place is about. Who governs Britain is the argument we are always having in the House and, at proper intervals, through the ballot box.
If we divert this argument from the House of Commons either to the courts, as under the Industrial Relations Act, or to Pay Boards or Price Commissions which are not accountable to Parliament, operating under codes at which we are allowed to look only at periodic intervals but operating under statute which has a three-year period, then it amounts to the abdication by the Government and, I must say at the Government's insistence, by Parliament of their central responsibility to resolve these matters. It is because this statute is an abdication of ministerial and parliamentary responsibility for issues which everyone knows are in the forefront of debate in every advanced society that we believe that this Bill, if we have to have it at all, should operate for one year and then Parliament should look at it. If in its wisdom it chooses to renew the measure, that is a matter for Parliament.
If the Government insist, against the wishes of the Committee—and there was an all-party vote on this amendment—on taking this outside the arena of parliamentary responsibility and accountability for the next three years, then the responsibility for the failure of their policy will be one which rests peculiarly upon them. For that reason I suggest that we reject the amendment.

Mr. Bruce-Gardyne: I have a great deal of sympathy with the earlier remarks of the right hon. Member for Bristol, South-East (Mr. Benn). In his later remarks he was edging on to his rather hyperbolic participatory views. There are other arguments which must lead us to have considerable reservations about the proposals which my right hon. Friend is putting before the House. Before I refer to them I want to mention Amendment No. 59, standing in my name and the name of my hon. Friend the Member for Oswestry (Mr. Biffen).
As my right hon. Friend rightly pointed out, the amendment is designed to incorporate what in the view of some of us will be the best combination of the situation which emerged from the Committee, whereby these powers would require to be renewed by Order in Council on an annual basis, and the situation emerging from Amendment No. 58, by which the renewal could occur only for a maximum of three years. Acceptance of Amendment No. 59 would provide for a combination of these two features and it is on that basis that I commend it to the House.
I was not a member of the admirable Committee which studied this Bill. Everyone who has studied its debates has been deeply impressed by the care with which it dealt with the Bill and the high standard of argument. I have carefully read what my right hon. Friend said and I think he would agree that he gave the Committee a rather fuller argument than he has given us today as to why the Government seek to rebut the proposition put forward by my hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and Oswestry on the three-year—one-year argument.
Basically my right hon. Friend made three propositions in Committee. The first was that by retaining the period of three years we would avoid an undesirable degree of uncertainty. He referred to
…where a period of short, sharp restraint designed…to administer a shock to the economy, has been followed by a massive inflation when the provisions have been suddenly removed'.—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 622.]
He was referring to what had happened in the past. We have all recognised in the past that this is the great problem


about this sort of legislation. We used to describe it as trying to build a dam of ice which led to an embarrassing flood when the spring came. Today's proposition, presumably, is that we have devised something which will take the place of the block of ice when the spring comes. I am not totally convinced about this.
My right hon. Friend's second argument, which he repeated today, was that a three-year span for this legislation would make it easier to achieve agreement on a voluntary policy. Some of us, on both sides of the House, who regard a statutory policy as being objectionable, believe a voluntary policy to be even more so. Therefore, for those of us who take that view, this argument does not carry a great deal of weight.
I found rather fascinating the third argument which my right hon. Friend advanced in Committee. He did not advance it today. He argued that by having a three-year period for the legislation the Government would be absolved from the temptation to misbehave in an electoral period. I am not totally convinced of the power of this argument. If Governments are in a mood to misbehave in a pre-electoral period, they will misbehave, and the span of the legislation which they have put through will have very little to do with that propensity to misbehave.
Therefore, I was not totally convinced by the arguments of my right hon. Friend the Secretary of State in Committee. However, since then a number of things have changed. First, we have the draft code before us. Secondly, my right hon. Friend has provided for a considerably increased degree of accountability, and he has agreed to limit the action of the Bill to a maximum period of three years. It is only reasonable that we should pay tribute to the consideration which the Ministers gave to the views expressed in Committee. Also, it would perhaps not be remiss to congratulate my hon. Friends the Members for Oswestry and Cirencester and Tewkesbury on the powerful arguments which they advanced with a view to achieving this objective.
The third distinction which has arisen since the discussion in Committee is that substantial doubts have been thrown externally on one of the important strands of argument which ran through the dis-

cussions in Committee, about the compatibility of the Bill with our obligations to the European Economic Community.
I find the three-year limit which has been introduced a little difficult to assess. My inclination is to feel that in matters of this kind three years is about as long as eternity. If this legislation remains on the Statute Book for three years without the Government being obliged to submit it for renewal by Order in Council subject to the affirmative procedure we are imposing what might be regarded as a life sentence for the free enterprise economy. Three years may not sound like a life sentence, but, in reality, if we retain the legislation for three years it will be very difficult to return to the sort of economy in which most of us on these benches believe and in which, I like to hope, many of my colleagues on the Government Front Bench, in their hearts, also continue to believe.
4.15 p.m.
The second argument on which I wish to touch is the question of the possibility of conflict between this legislation and our obligations under the European Economic Community. If we authorise the Government to maintain the legislation for three years, and if it is in conflict with our EEC obligations, we are putting ourselves and the Government in a very unfortunate and undesirable predicament. I read very carefully what my hon. Friend the Chief Secretary said in columns 734–6 and 760 of the OFFICIAL REPORT of the Committee proceedings when Clause 12 was being discussed. The crucial point which he made was the assurance which he gave that
The Government's intention…is that during phase 2 we should comply with our Community obligations, that we should not take the power to override them."—[OFFICIAL REPORT, Standing Committee H, 15th February 1973, c. 736.]
He insisted that the Community understood what was happening.
That was on 15th February. On 16th February an interesting article appeared in the Financial Times by Mr. A. H. Hermann headed
UK Anti-inflation laws may conflict with EEC rules".
It stated:
The U.K. anti-inflation legislation might bring large companies who can be said to be in a market dominating position into conflict


with EEC competition rules. At least one large group will be advised by its legal staff that the anti-inflation Bill can never become fully applicable law in as far as it would run contrary to directly applicable provisions of the Treaty of Rome.
The discussion in Committee was concentrated on the essential issue of steel pricing, but a wider issue was introduced by the article in the Financial Times—a newspaper whose comments, as my right hon. and hon. Friends will agree, have to be taken with a certain degree of seriousness.
In Committee, the Chief Secretary drew attention to the letter which the Commission was reported to have written to the British Government and the Press statement it made about it. The important phrase in that statement, which my hon. Friend quoted in Committee, was:
It"—
that is, the Commission—
has, however, reminded the British Government that Government measures to control prices set by coal and steel producers are incompatible with certain obligations under the Treaty".—[OFFICIAL REPORT, Standing Committee H, 15th February 1973; c. 760.]
The Chief Secretary's argument was, "Yes, but these controls are for phase 1 only and thereafter ECS steel and coal recover their freedom".
I hope that my colleagues have studied carefully an article in today's Financial Times—I apologise for quoting the newspaper so frequently, but I think we all read it from time to time—which stated:
In theory, the steel industry will move away from Government control on prices from May 1. It hopes to persuade the Government to accept a 10 per cent. price rise, although customer industries believe that not much more than 6 per cent. will be allowed in view of the Government's counter-inflationary policy'.
Is that in conformity with the European Coal and Steel Community Treaty? I doubt it very much. I do not believe that we have any serious intention of releasing the British Steel Corporation from the steel bands of Government interfere lee and control over their pricing policies in phase 2. If we have not, the patience which the European Economic Community has shown with our behaviour to date will soon begin to wear thin.

Mr. Benn: The hon. Member will have noticed that Clause 8 gives the

Government power to override the European Communities Act, for that clause says specifically that
any provision of any Act, whether passed before this Act or later
—and that includes the European Communities Act—
…shall…have effect subject to such exceptions, modifications or adaptations as may be specified …
That means any action taken or to be taken by the Government. Therefore, were there to be a conflict of policy, Clause 8 would take precedence over our obligations under the European Community.

Mr. Bruce-Gardyne: This has been discussed on numerous occasions and was discussed in Committee. It is a rather deep legal point. Being no lawyer myself I am hesitant to get involved in it, but in any case I do not think it is strictly germane to my argument because my basic argument is that, not merely in the steel sector but in other respects, if we give the Government this authority for three years, then long before those three years are up we shall be in dead trouble with the European Community. I do not take the same view as the right hon. Member for Bristol, South-East on the question of the European Community, nor do I take the same view as my hon. Friend the Member for Oswestry. One of the reasons why for years I have been an enthusiastic supporter of British entry into the European Community is precisely that I have hoped and believed that once we were inside the European Community we would escape the temptation to succumb to the pipe dreams of people like Sir Frank Figgures and Sir William Armstrong and Mr. Campbell Adamson. What worries me about what we are doing at the moment is that we appear to be giving greater priority to the Figgures and Armstrongs and Campbell Adamsons than we are prepared to give to our obligations under the European Community Treaty.
After all, I put it to my right hon. Friend the Secretary of State, one of the prime objectives and purposes of this Government has been to bring this country into its rightful place in an enlarged European Community. What folly it would be if we passed legislation this afternoon which would lead us into an intolerable conflict


with the Community of which we are a new member. This, I submit, is a weighty consideration which we cannot afford to ignore, because if we give the Government three years today then, long before those three years have been concluded, we shall be facing this dilemma in a very acute form, and this in itself is to me a major argument for deep concern about the desirability of giving my right hon. Friend the amendment which he seeks.
I turn to one more consideration. We now know, as I said, that a further distinction between our debate today and our debate in Committee is that we now have the draft code. Let us hope and pray that it is a draft, because I think we have seen already that it is less than word perfect in one or two important respects. We have this remarkable document, and my right hon. Friend told us today that stage 3 will be accompanied by a new code. The right hon. Member for Bristol, South-East pointed out that the date of stage 3 is as yet unknown. I cannot help wondering whether perhaps we may not find stage 3 is a little late coming this year. I cannot help wondering whether we may conceivably find that the progress which my right hon. Friends hope to make with stage 2 is somewhat long drawn out, and as a result stage 3 gets held back.
The important point for us to consider this afternoon is that if we give my right hon. Friend his substantive amendment on this clause we are in principle allocating to my right hon. Friend the right to operate on this document—we have no certainty that this document will be amended or substantially changed—for three years. I hope that my hon. and right hon. Friends will give very serious consideration to what that implies. After all, this document is one which has even made the CBI turn. I am not sure one need say very much more about it than that.
I come now to what is to me the most important argument against the course which my right hon. Friend has suggested and also the most important consideration which we have to bear in mind in making up our minds how we are to deal with this group of amendments. My right hon. Friend said that for the House to require the Government to seek renewal of this legislation on a yearly basis by

Order in Council subject to the affirmative procedure would demonstrate, on the part of this side of the House at any rate, a lack of will. What worries me is that, as I have explained at earlier stages of our discussions on this Bill, I do not accept—I have never accepted; I do not think I can accept—that a statutory control of prices and incomes as such is the answer to inflation.
I can accept it on the assumption that it may have some impact in abating inflationary expectations, and thereby make it less painful for the Government to tackle inflation at source by abatement of their own expenditure policy and curtailment of their own deficit financing. But—and this is the crucial point for me—I put it to my right hon. Friend that to date we have not had very much in the way of clear evidence that the Government are indeed determined to tackle inflation at source. The cutting out of the hover train hardly adds up to a massive attack on public expenditure, particularly when it follows by only one week the decision to proceed with Maplin and the decision to provide another £350 million for Concorde, and so on.
We have very little evidence of a determined assault upon what to many of us is the fundamental generator of inflation at the present time; and what concerns me most of all is that if today we give my right hon. Friends the three-year provision of these powers, then these powers, which should be and can only be a top dressing added to the application of counter-inflation policies, will be taken as a substitute for those policies themselves; we shall find ourselves in a position where the cosmetics have become the substance.
If we are to rely exclusively on this legislation I do not believe we shall see much progress in the battle with inflation, and, indeed, it would appear to me that if that is to be the course we are to pursue it can only be said that we have no serious intention of abating inflation but only an intention to abate anxieties about it. Of course, we cannot abate those anxieties very long so long as inflation itself persists.
It may be that my anxieties are unfounded; it may be that my right hon. Friend the Chancellor of the Exchequer next week and my right hon. Friends in


the months ahead will demonstrate determination to get on top of the rising wave of public expenditure and will demonstrate determination to bring back to tolerable proportions the enormous public sector borrowing which faces us in the year ahead. If so, this House will have no hesitation in giving to them the renewal of this legislation in a year's time when they come to ask for it. If, on the other hand, the anxieties which I have sought to express turn out—alas—to be well founded, then I do not imagine that my right hon. Friend would be seeking a renewal of this legislation in a year's time anyway.

4.30 p.m.

Mr. Robert Sheldon: In one respect I agree with the hon. Member for South Angus (Mr. Bruce-Gardyne). He got the equation right. One year equals temporary, three years equals permanent. In so far as the amendment deals with that aspect of the legislation, it is crucial to the future involvement of Government. It is clear that one cannot have a policy of intervention on prices and on the basic fundamentals with which industry is concerned which goes on for three years without the issue of permanent control being raised during that period. Because of that, it is not the incomes policy that is the important part of the legislation. I fully understand the pernicious nature of the legislation, which my hon. Friends have rightly opposed, but we have been through it before and we may perhaps go through it again without achieving a resolution of the problem. The innovation in this legislation is the likelihood of permanent control, permanent involvement by the Government in prices and perhaps in the most intimate areas of industry.
One problem that the Opposition have had to face following the nationalisation measures of the 1945 to 1951 Labour Government is to find ways of continuing the progress that was initiated in those years. It is no secret that many proposals have been put forward from time to time. Sometimes those proposals lacked a credible coherent intellectual base. They contained no basis of argument that certain industries should be nationalised for certain reasons. But that was not always so.
The industries that were taken into public ownership between 1945 and 1951 were not taken haphazardly. In the words of Nye Bevan, they formed the commanding heights of the economy. They were the basic industries on which others depended—steel and coal, and the transport industries—the railways, roads and, to a limited extent, aircraft. They were the industries—coal, gas and electricity—which provided the energy requirements for other industry. That was a coherent policy that found ready implementation.
Subsequently, people have looked for a coherent attitude to take in assessing the industries in which the Government should become involved in a greater degree, either through take-over or through more intimate forms of control. Attempts to find such a coherent attitude have always been unsuccessful.
In the legislation before us the Government are selecting the areas in which Government involvement will increase. The criteria for that level of involvement—or by a future Labour Government conceivably nationalisation or public ownership—are laid down both in the Bill and in the draft code. There are certain industries which because of their size—category I—are considered to be sufficiently important to require certain Government intervention.
It would be foolish to assume that at the end of three years a Government who are in favour of greater intervention will readily dismantle controls once they are in working order. I draw an analogy between the war-time controls, which enabled nationalisation to be put into effect with ease, and these controls brought in by a Conservative Government which will force private industry into a closer relationship with the Government.
It has been said that private industry can be left on its own if it delivers the goods. But when the Government involve themselves in prices, profitability and the crucial decisions taken within industry, how much remains for industry itself to operate in the interest of the country? The whole spur of private industry is its profitability, leading to investment, which past socialist and Labour Governments have tended to accept as of special value. Once that profitability is taken


away, once the element of competition that might benefit the country are reduced, what is left will not remain in private hands for all time.
By introducing the code the Government will bluff small industry. The Government can control large industry, but the effect of the code on small industry is a nonsense and everyone knows it. It is an attempt to import from the United States a system that worked quite well there because it was a novelty. The United States had not been round the treadmill of prices and incomes, as we have time and again. The policy had a drastic effect. It took the Americans a year or two to respond, by which time they were able to reduce the inflationary expectations. No one can conceivably say that that is so in Britain today. We are punch drunk with prices and incomes policies. This is just another one which we all know will fail. The only question is, what comes after it?

Mr. Bruce-Gardyne: The hon. Gentleman said that the Government can control large firms but that the idea of controlling small firms is nonsense. I take it that he means that there will be no control over small firms. It is not inconceivable that the situation will be far more painful for small firms. Many large firms controlled by the Government will be the price leaders in their industries and will be able to operate on a much narrower margin than will the small firms which are not controlled. Yet in practice the small firms will have to abide by the prices dictated by the Government through the large firms.

Mr. Sheldon: The point was put very well yesterday by my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) when he spoke of certain nonsensical attitudes in the draft code and pointed out its uselessness. The danger will occur when some over-officious person in the agency tries to assert an authority which he is not entitled to assert. As a result there will be bitterness rather than anything which is beneficial either to the present policy or to the country.
The implications of the Government's certain failure in this area over the next few years will give way to a much greater control of industry than any we have known before. What will happen

is that civil servants do not apply themselves to problems and, having failed, leave the matter there. They turn to new methods for solution.
Anybody who looks at these new methods must appreciate that we shall see more rather than less Government intervention as the Government try to make up what has been lost in a policy which surely will fail. In three years' time we shall have a very different prices and incomes policy from that which we see today. There will be certain areas which the new Labour Government will want to reject out of hand and there will be other areas which they will want to take over and develop. If the present Government insist on giving us a faulty tool, they will not be surprised if the next Government improve it and use it.

Mr. Peter Hordern: The hon. Member for Ashton-under-Lyne (Mr. Sheldon) is the Chairman of the General Sub-Committee of the Committee on Expenditure whose report more closely reveals the real reason for inflation than does the Bill which we are discussing today. I thought that some of his remarks could well have been made from the Conservative benches, but I will embarrass him no further on that subject.
I was not a member of the Standing Committee that considered this Bill, but I have had the privilege of reading the debates on Clause 4. It struck me that the arguments were very much concerned with the position of Parliament and the constitutional position, which was referred to earlier in this debate by the right hon. Member for Bristol, South-East (Mr. Benn). I do not wish to add to those arguments, although I hold them to be perfectly true. What I wish to say relates to the three-year period proposed in the amendment, compared with the one year proposed by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), in the context of the value of this Bill at all. It seems to me that although it is called the Counter-Inflation Bill, it has a limited value in terms of inflation but a great deal of importance in its concern with industry and the economy.
One of the points put forward by my right hon. Friend the Secretary of State for Employment was that the statutory


part of the proposal could be suspended at any time and a voluntary provision could be brought in. I do not know what the circumstances will be for the introduction of this voluntary agreement. I hope that first there will be clear evidence that inflation has been completely controlled and mastered before any voluntary arrangements are brought in.
There has been a great deal of experience in the last few years of attempts at voluntary agreements between the Government and the TUC and CBI. We have had what have been called "solemn and binding" agreements, we have had treaties drawn up at Lancaster House and all the rest of it. But in my opinion these voluntary arrangements are of no purpose if they seek to control inflation unless other means are provided for that control—in which case the voluntary arrangement will hardly be necessary.
The problem of controlling inflation is a universal one in every free country in the world. Various countries from time to time have applied themselves to a prices and incomes control policy, sometimes voluntary and sometimes statutory. I do not know why we in this country believe that we are unique in facing this problem, but this is how we seem to regard ourselves when seeking to deal with it. I believe that we are the only country that places such importance on control of prices and incomes by legislative means and such little importance on proper monetary and fiscal control.
4.45 p.m.
It must be observed that the countries which have placed less reliance on prices and incomes control, for example West Germany, which has yet to produce any form of prices and incomes control, over a long period of years have had the best record in containing inflation. It is also noticeable that the most recent country to introduce prices and incomes control, the United States, has discarded controls at the earliest opportunity. It is also evident that the reason the United States was able to do so was that it had a close control of money supply in the United States economy and has had, if not an absolute achievement, certainly the intention of controlling the rate of public expenditure.
President Nixon in his New Year message referred to this topic and said that it was essential that public expenditure should be kept within the growth of GNP. Our recent debate on public expenditure showed that there is no such intention in this country in the forseeable future. Whether we look at the Dutch economy with their efforts at controlling prices and incomes by legislative action and their continued failure to control inflation, or whether we look at the French economy where there has been a similar experience, we can only arrive at the conclusion that to seek to control the system by statutory action and by legislative means is only to invite disaster.
On the question whether this should be a three-year or one-year programme, it is important to examine what is in the Green Paper because of its effects on the economy. This is not only a question whether the provisions in that document will have any effect in controlling inflation but a question of the real damage that can be caused by sticking to the prices and pay provisions.
Paragraph 36 of the Green Paper says:
In addition prices should be reduced where other factors (such as an increase in the volume of sales since the last price increase) lead to a significant fall in allowable costs per unit".
That can mean only that if a company by being efficient increases its productivity by better methods and has been able to attract a higher volume of sales, it will have to reduce its prices. That is the effect of the proposition contained in paragraph 36. But a further paragraph appears to state that it is perfectly all right if that company wishes to say to the Prices Commission that some of its profits could be devoted to investment.
I hope the House recognises the distinction to be drawn between profits and investment as if each were entirely unrelated to the other. In the one case profits, if gained by whatever efficient means, are something of a dubious kind to be returned to the Government or to whoever they have to be returned to in the form of lower prices. The other is that investment is highly desirable and socially good and should be undertaken no matter what little prospect of profit


there is before it. That is the proposition, and I must say that it is an extraordinary notion. I hope that my right hon. Friend will be able to put my fears at rest. To separate profit from investment and the pursuit of profit out of investment seems to be an extraordinary move and it is one which I hope will not last.
The level of investment generally has been very low in this country for many years past. But so also has the level of company profits for many years past. That is the reason for the low level of investment. My right hon. Friend the Secretary of State for Trade and Industry is very conscious of this and he is doing his best, quite rightly, to revive confidence in industry. Sometimes I feel that he is striving to plumb the commanding depths of the economy and that the sectors which he feels worthy of support are not those which some of us or the market would feel worthy of support. But at least it appears a genuine effort to revive investment.
However, my right hon. Friend's efforts like many others in other Government Departments are all very expensive. This is the point which the hon. Member for Ashton-under-Lyne mentioned in his excellent report—the very large and substantial increase in public expenditure occasioned just over a year ago, with which one must put the large deficit which will be revealed in next week's Budget and the borrowing requirement which will become necessary. It is that borrowing requirement and the difficulty of fulfilling it which are the real causes and will continue to be the real causes of inflation for the next year or two.
If we are talking about counter-inflation, the solution now is in reducing the growth in public expenditure. It does not lie in trying to impose statutory control over the conduct of business and industry in the way that this consultative paper does.
I hope that the one-year argument as compared with the three-year argument will not prove necessary. I like to be optimistic about these matters. I like to feel that as events unfold we shall get better control of public expenditure, and it will not be for the want of trying from some of my right hon. and hon. Friends and myself if that is not the case. If that

is so and the borrowing requirement is not so large and if proper monetary policy is carried through, of which there is a possibility, the necessity for statutory prices and incomes policies and voluntary prices and incomes policies will disappear. But it may be some time in coming. It may even need more than one year for this situation to arise. It may even need three years. Provided that the Government follow proper measures to reduce inflation and do not depend upon this absurd document to do so, I shall be happy to support them.

Mr. Eric S. Heffer: If I were a leading capitalist in this country I should undoubtedly be in favour of one year as against three years and even more in favour of no such policy at all.
We are in a remarkable situation. The Green Paper says:
Where an enterprise is making a loss, it may increase prices to cover its costs.
It goes on to prices and profit margins, saying:
Prices should be determined so as to secure that net profit margins do not exceed the average level of the best two of the last five years.…
We all know that profits in this country have been falling for some time. The explanation for it which I put forward is not the same as that of some right hon. and hon. Gentlemen on the Government benches. But if I had been in a situation where my rate of profit was falling and I was then told that I had to determine the level on the basis of the best two of the last five years, I should not be very enthusiastic about this code.
We are not debating the code at the moment. That will come on Monday. But it has a certain relevance to this debate. We know that a falling rate of profit leads to a falling rate of investment. But from where are those who are in capitalist industry to get their investment?

Mr. Biffen: The DTI.

Mr. Heffer: Exactly. But there are problems about that which I shall not dwell on at this stage. I may have a chance to do so on Monday.
This Government have got themselves into a dilemma. The prices and incomes policy of the Labour Government, despite all the arguments about helping low-paid


workers and so on, was designed only to hold down wages. That is why some Labour Members had the traumatic experience of sitting on the Government benches and arguing day and night about the various orders coming before the House. Prices were not held down.
This Government want to hold down wages. But they know, because of what went on during the time of the Labour Government, that no one has any confidence that wages will be held down and that prices will not go up. For that reason they feel that they have to do something about prices, and by doing something in these terms they are hitting at the very heart of the nature of the capitalist society in which we live——

Mr. Biffen: Hear, hear.

Mr. Heffer: One does not have to be a genius to understand that. One has only to have left school at 14, as I did. It is understood very easily. But that is the problem, and it is here that the Government are getting themselves into difficulty.
I do not believe that we are living in any post-capitalist situation. I have heard these arguments before. I remember a book written by one of my right hon. Friends called, "The Future of Socialism", in which he argued that we were not living in a capitalist society any more and that we were in a post-capitalist society. That is a lot of rubbish.
The argument is about uncontrolled capitalism or controlled capitalism——

Mr. Benn: My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) did not serve on the Standing Committee. I was quoting the hon. Member for Cornwall, North (Mr. Pardoe), who described himself as a post-capitalist. I share my hon. Friend's view.

Mr. Heffer: I apologise to my right hon. Friend. I misunderstood his point.

Mr. John Pardoe: It is true—and it is becoming a great phrase which is regularly thrown round in this House—that I described the Liberal Party as "the post-capitalist party". I did not suggest that we were living in a post-capitalist society. If we were, we might be in a Liberal society, and certainly we are not there yet.

Mr. Heffer: I do not know what a Liberal society is, other than a capitalist society writ large. However, I do not feel that we ought to get involved in an argument about what a Liberal society is.
The Government are in a dilemma, as would be any other Government who succeeded them. The dilemma is that in order to appear to be fair, they must control wages, which they intend to do anyway, and at the same time they must endeavour to control prices. That is the heart of the problem. That is an attempt to control the capitalist system. To follow that road is to end up with continuous legislation of a repressive kind. Hon. Gentlemen opposite do not want that, and nor do I. But nor do I want a capitalist society, and that is the fundamental divide between us.
5.0 p.m.
Where exactly are we going? That is the question that we have to ask ourselves. We have been all through this before. My hon. Friend is right. It is like a recurring nightmare. It goes on and on. There is a break for about a year, and then the whole process starts up again and gets worse. That is the trouble. It is a terrible situation for us in the House, and what the Government are proposing will not solve any of the basic problems.
I warn hon. Gentlemen opposite that if they follow this line of controlling prices, controlling 100 companies, getting information, and so on, it will be that much easier for us eventually to take over these companies. What hon. Gentlemen opposite have to ask themselves is where all this is going to end. If there is controlled capitalism to begin with, the next stage is the elimination of capital, with a controlled economy on the basis of a Socialist plan. That is what I want, but I want it done democratically. Into such a plan I should introduce democratic management and control, which is what we are not getting here.
Hon. Gentlemen opposite should be prepared today, like some of us were on earlier occasions, to say to their right hon. Friends on the Front Bench that this time they will not go along with them that they are not going to support them. We had to say that. It took a lot of courage. It is not easy for someone to get up and tell his own side that he is not prepared to go along with what it is


doing. Such action is always misrepresented in the country. People who take that line are called a bunch of loony rebels. But if one feels strongly about an issue one has to say so, and I hope that this proposal to reverse a democratically arrived at decision of the Committee will be defeated this afternoon.

Mr. R. B. Cant: In the Lobby there are a number of members of the Press who have a memorandum giving information about the agreement reached between the Labour Party and the TUC. The embargo is lifted at five o'clock. Can my hon. Friend say whether there is anything in that document that is likely to help us?

Mr. Heffer: With respect to my hon. Friend, I was not a member of the committee which drew up the document and I am as anxious to read it as he is. I have seen only the brief document given to the Press a few weeks ago. If Members of the Liberal Party have received this memorandum before I have been given it I shall be very annoyed. I do not know the full details. All I know is that a future Labour Government must have the full support and agreement of the trade union movement. That is the lesson that we learned during our six years in office. The document sets out the alternative economic strategy that will be required to deal with the problems of inflation and advance us towards a Socialist society, but that has nothing to do with this amendment.
Sooner or later there will be a vote on the Government's proposal. I hope that as a result of that vote the position will be as it is set out in the Bill now. If we have this provision for one year, we can have another look at the situation at the end of that time and if necessary extend the period for a further year. At each stage we can decide what we want to do. We shall not be able to do that if we are saddled with this policy for three years.
Every Government who begin something on a temporary basis say that it is to run for only a short period, for two or three years, but we then find that the temporary period becomes permanent and we are saddled with the provisions for ever more. That is the situation that we have

to face, and that is why I hope the Government will be defeated this afternoon.

Mr. Hugh Fraser: It falls to me on this occasion—something which does not happen very often—to congratulate the hon. Member for Liverpool, Walton (Mr. Heffer) most warmly. His imperishable words should be inscribed in some Conservative Central Office pamphlet. Seldom has there been a better analysis of the problems facing the House than that given by the hon. Gentleman.
To his words should be added a few from The Times this morning, where the right hon. Member for Coventry, East (Mr. Crossman) described the great advantages which could lie in store for some future Labour Government in having readily to hand the necessary instruments for carrying out massive nationalisation. I hope that all those present from the Press will take these remarks down and rush them off in a cleft stick, or with a flaming torch, to Smith Square.
As the hon. Member for Walton said, there is nothing more certain in legislation than that the provisional becomes the permanent. There is a French phrase, with which I shall not weary the House, which bears that out precisely. The so-called provisional becomes permanent. We see the provisional steel houses put up 30 years ago mucking up the country, but still being inhabited by unfortunate people. The so called provisional rapidly becomes permanent.
We are dealing with what is called emergency legislation. I gave the hon. Member for Walton my attention, and perhaps I may have his now. I see a great deal of economic confusion, not only in the House but in the Treasury itself, about what should be done, Occasionally, the best guidelines for Parliament are the guidelines of what is in the democratic interest without bringing in special pleading, one way or another, for one's pet solution to the financial problems.
There are still some points that are worth making about economic theory. To imagine for a moment that the cure to inflation is enshrined in cost-push inflation engendered by higher prices or higher costs is not true. There are far wider and more fundamental matters


involved, including the money supply, the budgetary deficit, and many other matters which are not, and cannot be, dealt with in these papers.
There is a grave danger that if we use these instruments as the main and central point of Conservative policy, round them will be built a whole series of economic myths which will become central to the whole of the fiscal and budgetary policy of the Government, and that would be extremely dangerous.
The Government have many attributes, but one of their attributes is not merely inflexibility but, when certain situations have been achieved, of total stubbornness and refusal to move. There is a grave danger that, having adopted this policy, they will think it right to stick to it, whether it is working or not.
I back the idea of this policy for a limited period before it is reviewed by the House, but that period should be precisely one year—and it is on that one year that we shall vote tonight. My right hon. Friend has made some concessions for which I am sure the House is grateful. For instance, the House will be permitted to review annually the workings of the Price Commission and the Pay Board. The Italian Grand Council of Corporations was permitted annually to review the detailed reports of some of its concomitant Darts but never to review general Government policy. It is precisely this right, once a year, on which the House must insist.
Some confusion exists, which one sees in Government proposals at the moment, about fighting inflation when we have a Budget deficit—that is a more accurate description than "net borrowing requirement"—running into several thousands of millions of pounds. There is also VAT and the new proposals on company taxation, to encourage companies, quite rightly, to distribute more. All these things are moving us into an era of some economic confusion. If any hon. Members think that they know all the answers to these problems, they should be immediately promoted to another place.
We blunder on with a worsening economic situation. In these circumstances, it is the duty of Members of Parliament to see that their rôle is pro-

perly fulfilled. That rôle is to control the executive and study emergency legislation once a year.

Mr. Stanley Orme: The major point that the Government have to answer is the fact that, in Committee, all their arguments were thoroughly defeated by hon. Members on both sides on the questions of parliamentary accountability and the length of time that this legislation should be on the statute book before it is reviewed.
The central argument, about parliamentary accountability is sharpened by the loss of sovereignty that we have suffered in recent times, not least in regard to the EEC. It would be a very weak Parliament that allowed other measures to be taken to remove further powers from this House. I was an opponent of the Labour Government's prices and incomes policy, but at least that policy was accountable to Parliament. Hon Members opposite, especially the present Secretary of State for Employment, deployed their arguments and talents in opposing orders on this subject between 1966 and 1970. They could do that because the legislation provided for parliamentary accountability and for those orders to be prayed against.
The Pay Board will be able to operate independently, outside the House, in conclave, not answerable to the publicly-elected representatives, except perhaps when we have an annual omnibus report on which we shall be able to raise all sorts of conflicting issues. What we would prefer to do is deal with specific issues as they arise—the restriction of a firm's price increase or the holding up of a wage claim. In a democracy, we should be able to argue these issues, and if necessary vote on them.
5.15 p.m.
My experience of voting is that one does not often win, but after a tough debate, when the pressure has been put on the Government, the Government often respond. If the only pressure comes from outside, from a corporate body, we have no means of influencing the Government. So the restriction to one year is an important democratic safeguard. The Government are flying in the face of majority opinion on this matter.
After one year, if they want to renew the legislation, they will be able to come


forward in a proper parliamentary way and seek to convince the House that a year's extension is necessary. The amendment in the Secretary of State's name means that, for three years, the Government will be completely free from scrutiny.
Three years does not sound a long time, but I remember a right hon. Friend of mine saying that seven days was a long time in politics. Three years is a considerable time in politics, particularly if we consider the change which has taken place, in less than three years, in this Government's policies. God knows what they will be like in three more years. At least an election will intervene.
This is a point that I feel passionately about. I believe in parliamentary accountability. I do not care whether we are talking about publicly-owned industries or anything else. We have a right to debate such matters in this Chamber. The hon. Member for South Angus (Mr. Bruce-Gardyne) mentioned the distinguished gentlemen who will be appointed to head these boards, and one thinks also of people like the General Secretary of the TUC. I do not denigrate these people, who are leading people in our society, but they are not elected representatives of the people, directly responsible and answerable to this Parliament.
A three-year period would represent a basic erosion in this system. I only hope that the House has the courage tonight to maintain the position that we insisted upon in Committee.

Mr. Nicholas Ridley: So far, from back benchers on both sides I have not heard one word with which I would disagree. It is extraordinary that unanimity can come upon people who hold such disparate views on the substance of a prices and incomes policy or upon economic theory itself. But what we are talking about is parliamentary accountability, and that is what I want to say something about.
There are two separate points. The first is the duration of a prices and incomes policy and the second is whether the Government should come back to Parliament for annual powers to carry on. Although those issues are closely linked, they are in fact different. On the question of duration, I for one am extremely grateful and very much impressed

by the Government's listening to our pleas in Committee to put a time limit of three years on the whole of this operation. This must be registered as a major improvement and it would be quite wrong and churlish of me not to acknowledge that.
I must also tell the House, however, that in my opinion three years is a pipe dream. The real world will intervene before this summer's leaves have left the trees, perhaps even before they have grown. When the world of business, of economics and of economic crises takes over again as soon as the Bill has left this House, the idea that we even spent time debating whether the duration of the operation should be three years or one year will seem totally unrealistic.
One has only to study the code and to look at the effect upon investment of the prices section of the code. One has already heard what leading industrialists say about it. One has heard the opinions of those who are in business and concerned with investment of the effects that this legislation will have on investment. Yet it is one of the Government's main worries and priorities to raise the level of investment.
One remembers that in a capitalist economy, about which the hon. Member for Ashton-under-Lyne (Mr. Sheldon) so rightly talked, it is the free decisions to invest, to manufacture goods and to sell them, and to offer one's labour for reward which produce the dynamics in society. If people think that it is not worth their while to invest, to produce and to labour, they cease to do those things. That leads to an immediate requirement for more Draconian and stringent powers and interventions than even hon. Members on the Opposition benches of the most Leftist persuasion could ask for. Perhaps the House will listen to one short sentence from Adam Smith. I believe that is as true today as it was true then.
It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our dinner, but from their regard to their own self-interest.
That is the force which will overtake this policy.
On the wages side, it may be that the policy will last even less long. The Government are already invoking stage 3


to solve particular problems even before stage 1 has been completed. The pressures of strikes and industrial disputes which will build up—they are building up already—will force the flexibility of the system to be used before the Bill is even law. It will not be long before it is discredited.
I turn to the question of the annual renewal of the powers. Those of us who believe that the powers should be renewed annually have argued that it is not very much to ask the Government to come back to Parliament for an hour and a half for an affirmative order. If the present Parliament is to last for another three years, that would be twice. There would be two occasions when the Government would come back to Parliament for a debate lasting an hour and a half. We do not think that that is asking a great lot.
There are those outside Parliament, however, who are cynics of this House, who say that it is a myth that an hour and a half of debate twice a year in some curious way will change the course of policy or the control of the executive. They say that we are in any case like a lot of sheep when we troop through the Lobbies, and the fact that we have talked about the matter in a debate does not mean that that is real parliamentary control.
Then there is the Government's argument that they do not want to have a 1½-hour debate because it is possible that it would in some way show a weakness of resolve if they were to submit to it. I do not believe that the great trade union leaders are sitting quivering as to whether the amendment is accepted or whether they should proceed on their own to decide whether they will have the authority to push over this policy, or that the great companies are waiting to hear whether the clause is carried before deciding whether to comply with the price code.
This is not the real world. The people who make the decisions will not be influenced one way or the other by whether or not there is a debate after a year. But the Government are no doubt slightly frightened. The only precedent that has been mentioned has been that of the Rhodesia sanctions and their

annual renewal. I detect each year, year after year, a slight quivering, a slight intensification of activity in the Whips' offices, as we near Christmas and the annual renewal of Rhodesia sanctions. But the occasion always passes by, and the Government get their way.
This argument is largely academic. It does not matter which amendment is accepted tonight. We kid ourselves if we believe that our scrutiny and control will in some way hold down a tyrannical Government. Nor do I believe that the Government's protestations that they do not sound convincing if they do not get their way mean anything. The debate has a deeper, more symbolic meaning. It is not about the arguments which have been put forward recently and just now by myself. The debate is about where this House stands in relation to the executive and to the growing and changing troubles in our economic system.
Parliament first sat with the sole object of controlling the executive and stopping it from raising too many taxes to pursue causes which the people did not want to back. But lately Parliament has sat to force the Government, on occasion after occasion, to spend more money, to give way on this, that and the other wage claim, to start new programmes to provide the facilities required in the constituency of each hon. Member. Parliamentary control was devised as a means of limiting the Government's expenditure but has now become the engine for increasing it. That is why we have the problem of inflation.
I shall not go over the arguments of my hon. Friend the Member for Horsham (Mr. Hordern) and my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser). They said that we are spending too much money. What lies at the back of this is that the Government have found that they are unable to resist the pressures of Parliament. If Parliament is in disrepute in the public eye, it is not because it is futile but because it has exerted its pressure over the years towards increasing the demands upon the public purse instead of limiting them.
There are those who say "Let us set up these agencies. Let us take the decisions away from Parliament and keep them for three years in these agencies, so that the agencies can be immune from political pressures and can control the economy in this way." That is the wrong way


to defeat inflation. It is merely hiding from ourselves the reality of what is happening.
All hon. Members are guilty of having found it convenient to press the Government, and the Government are guilty of having always given way. Until we as a Parliament can command respect through our ability not just to press each good cause which arises, each industry in trouble, each constituency needing a new bypass and each wage claim, there will always be the tendency to try to take the power away from us, to give it to the agencies or, later still, to the CBI and the TUC in stage 3—if, God forbid, that should ever come to pass. That is why I believe that the debate is more deeply symbolic than just the mere question of parliamentary control.
5.30 p.m.
There is a stench of decay about the British economy, about our position as a great trading nation, as a nation earning its living in the world and as a nation which is growing and prospering. Until we face up to the realities which have caused us to slide into this position, all legislation will be of no avail and this Parliament itself will be of no avail. It is not only a question of the Parliament having control of the executive for one, three or any number of years; it is a question of Parliament taking an attitude to its responsibility so that when people entrust it to control the executive it does so in a way which will cure the problems of inflation instead of in a way which will increase them.
I for one am content to follow the majority on whether the term should be one or three years. But if my right hon. Friends on the Front Bench can learn anything from this little incident, let it be that, in the absence of Parliament controlling them properly, they have to control their own expenditure properly. There is no short cut to defeating inflation and the economic problems which bedevil us.

Mr. Frederick Lee: I have been provoked to rise to my feet by the fact that so far there has been unanimity throughout the House among those who are opposed to a prices and incomes policy. I am an unrepentant supporter of it. This has been a most remarkable debate in that on the Labour side I have

heard arguments urging the Government "Please do not proceed; you might make it easier for a Labour Government to take over industry"—which is passing strange to me.

Mr. Heffer: If my right hon. Friend does not understand what we are saying, that is too bad.

Mr. Lee: I understand what my hon. Friends are saying. I have been here a few years longer than my hon. Friend the Member for Liverpool, Walton (Mr. Heffer).
For those on the Government side of the House this may be a matter of conscience because every one of them came to the House avowing complete animosity to a statutory prices and incomes policy and now the Government, which consists of men who have done more to discredit a prices and incomes policy than any other men in Britain, are asking the House to reverse the position and to provide for a three-year period instead of a one-year term.
For my part I hope that the House will defeat the Government because I believe that the reformation that we have seen is not a sincere one. I believe, and here I agree with my hon. Friend the Member for Salford, West (Mr. Orme), that now to try to take out of the control of Parliament an annual scrutiny of where we are going on these vastly important issues is wrong. It robs Parliament of its role, function and purpose. The Labour Government never tried to do that. The Conservatives took full advantage of the fact that we asked Parliament's permission on every occasion when we laid an Order in Council. My feeling of sorrow about all this is that the true purpose of a prices and incomes policy has nothing to do with whether the period is three years or one year.
Recently the right hon. Member for Barnet (Mr. Maudling) was saying that we are suffering from a monopoly of trade union power. But the Government of which he was a member have been forced to bring into operation the family income supplement because the breadwinner in many families, who is engaged in full-time employment, cannot earn enough money to keep his family in existence. Is that proof of trade union monopoly power? I recall making a few comments at the Labour Party conference some


years ago in which I pointed out that we had had 25 years of full employment—ideal conditions for the trade union negotiator. Everyone was worried sick about the millions of low-paid workers. Yet that is the system which everyone apparently wishes to perpetuate.
Of course, respective Governments have used a prices and incomes policy for the wrong purposes. It is not merely a creature for economic crises; whether the House examines it every three years or one, it can never be that. I understand that members of my party are committed to the idea of evolving a better and fuller life, and yet they really believe in the stupid nonsense of so-called free collective bargaining, which is using any economic power one has and God help the bloke who does not have it. That cannot evolve into something which is fuller and better. That is why I do not understand the speeches made by some of my hon. Friends. They, like me are rightly indignant at the conditions under which millions of people have to live, and like me they assert that they want a planned economy. But they want it in every other sense because they say "By God, you must not interfere with free collective bargaining"—the golden calf to which we must all bow down.
I remember the arguments between the TUC and the Government a few weeks ago about whether incomes took 61 per cent. or 62 per cent. of gross national product. Whichever of those figures it is, it is a large part of the economy which some of us want to plan. I am not calling anyone a 38 per cent. Socialist because he does not want to plan 62 per cent. of the economy. But we are in a situation in which a Tory Government are driven to contradict everything they have said or done for six or seven years and it does not become us to begin to try to get them out of that jam by saying "Do not proceed with this, because if you plan the economy you make it easier for us to take over industry."
I know that there is now a belief throughout the nation that a prices and incomes policy is synonymous with restriction. It is nothing of the sort, or it should not be if properly used. It should ensure that without resorting to the frauds of inflation we pay every man and woman

the highest possible amount we can, consistent with carrying out other policies such as an increase in the social services, housing and all the other amenities which our economy should increase. These are the objectives of a properly constituted prices and incomes policy.
I listened to my hon. Friend the Member for Walton telling us about the failure of the Labour Government's policy because prices were going ahead of incomes. I challenge him to tell me of one period between 1966 and mid-1968 when incomes did not go ahead of prices. I know that we ratted on the policy in the end, not because it was an economic failure but because of the political consequences which the Conservatives forced upon us for purely party political reasons. They won the election, but then they faced precisely the same problems as we faced.
I agree with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that it is wrong to try to get out of problems by emasculating the House of Commons, which is the body that should have the say-so. I think that there were 25 occasions on which the Conservative Opposition divided on Prayers. They had every right to do so. The principle behind what they were doing was wrong, because they had a purely party political purpose, but we were right to give them the opportunity.
The Government, having discredited the whole conception of an incomes policy, have been driven to use it as an emergency measure in a crisis. For them then to try to rob the House of the opportunity to criticise them on it is the last refuge of cowardice.

Sir Robin Turton: The right hon. Member for Newton (Mr. Frederick Lee) is a strong and compelling advocate of the principle of the Bill, but he overlooks the Bill's origin. It was because the Government failed to obtain agreement with the trade unions on a voluntary scheme that it was necessary to have this Bill of an emergency character.
I want to speak for just a few minutes on the parliamentary angle. After the last war, in 1945, the then Labour Government introduced the Supplies and Services (Transitional Powers) Bill, giving emergency control of the economy, with a time limit of five years. My party


bitterly opposed that, because we said that emergency control of the economy could not be taken from the House for longer than one year. Eventually both sides agreed about that, and the emergency controls that remained were embodied in the Expiring Laws Continuance Bill.
What worries me about the present situation is that we are handing over the control of the economy, under my right hon. Friend's proposal, for a period outside the lifetime of this Parliament. That is contrary to everything my party has argued for and contrary to the practice and procedures of Parliament.
My right hon. Friend the Secretary of State is obviously trying to meet the point by his other amendments, but I ask him to try to deal with the problem of providing some form of annual renewal. I cannot see that the insertion of such a provision would cause any degree of uncertainty about the policy. With all the other examples that I could give, including the Supplies and Services Act and immigration controls, all for annual renewal, there was never any belief that the Government were hesitating. The reason for annual renewal was the question whether the need for the controls would last more than 12 months.
That is exactly the position now. We all support my right hon. Friend in the psychological drive to make the nation realise how essential a prices and incomes policy is, as the right hon. Member for Newton said. Our doubt arises because we wonder whether in two years or one year we may have moved on to stage 3 and may well want different legislation for the House to consider.
My right hon. Friend would not lose any of the support of the country for his policy by making an annual review to Parliament, within the three years' basis in Part II. If he does not, I do not think that he can find any precedent, outside wartime or the immediate post-war period, for the House handing over to the executive the control of the economy for such a long period.

5.45 p.m.

Dame Irene Ward: I am in a quite peculiar situation, because I seem to be the first Conservative Member to speak in great support of the Government. I have often been described

as a troublesome rebel. I only wish that all my hon. Friends who have spoken today had given me a little support in the past on some of the matters that I thought important for the country.
I shall not pursue that point. I intend just to say what I want to say, as I always try to do. We have not so much been discussing the Government's amendment today as slipping over into a discussion about matters that should be discussed at the time of the Budget.
I support the Government amendment, but I want also to say something about the speeches made by a number of my hon. Friends about Government expenditure. The time has come when my right hon. Friend the Chancellor of the Exchequer, whom I support generally in almost everything he does, might point out to all his hon. Friends that the vast bulk of Government expenditure, which I agree is very large, has been spent to make the country modern and competitive, which it will be, to support the policies that must be pursued in the world.
I am staggered that so many of my hon. Friends, who are just as entitled to their views as I am to mine, do not seem to have realised that a great deal of Government expenditure has been allocated entirely with the objective of making us an up-to-date Power. For example, when the massive capital sum to be spent on the steel industry was announced, my right hon. Friend the Secretary of State for Trade and Industry rightly said that when that money had been spent to modernise the industry we should have the most important steel-producing industry in the world. Most of my hon. Friends who have spoken today, who have been much more in support of the Government's theories, should have been delighted.
I find it odd that my hon. Friends should be so critical. Do they all now say that it was not right to build new hospitals, to build and modernise schools to increase educational opportunities and to do all the things that will help create a first-class future for our country?

Mr. John Hall: I think my hon. Friend will agree that my hon. Friends have shown some doubt about the wisdom of the extent of Government spending. They have not been questioning the objectives or the subjects of that


spending. They have been pointing out that Government expenditure of that size is bound to add to the inflationary pressure. We must take that into account when deciding what our political programme will be.

Dante Irene Ward: With great respect to my hon. Friend, I have listened carefully to all my hon. Friends' speeches today. Not one of them referred to inflationary expenditure. They were criticising general expenditure. Maybe they think that Government expenditure at the present level will add to the inflationary pressure, but they did not say so. If we modernise our steel industry to the extent that is proposed, that will be economically beneficial to the country. I cannot understand how anybody could argue that that is inflationary. If it is inflationary, it means that we cannot do anything to bring industry up to date and that we cannot spend money on industry or technological education. However, my hon. Friends have not argued that; they have simply said that the Government have been spending too much.
I am a fairly regular attender at this House and I notice that my hon. Friends, who are entitled to their views, do not go into the Lobby against the Government. If I feel strongly about a matter, I go into the Lobby against the Government. It seems that I am the only Member on the Government benches who supports the Government on this occasion. That causes me some pleasure and some amusement. I do not gain pleasure from hearing some of the comments that have been made, although most of them were not related to the amendments which we are discussing.
My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) made a most interesting, comprehensive and reasonable speech. I have a limited knowledge of finance and of the problems of joining the EEC, although I am a great supporter of entry. However, I happen to have faith in what my Government are doing and how the Bill fits in with the policies which are essential now that we have become a member of the EEC.
I try not to talk about things that I do not think I know anything about. I am not sufficiently politically motivated to do so. Perhaps that sounds arrogant,

but I do not mean to be arrogant. Whether people agree with me or not, I always feel when I am speaking that I am speaking about something of which I have some knowledge. I do not get myself involved in matters about which I have no knowledge to contribute. I accept exactly what the Government have said about the Bill in relation to Europe. I say that because I believe that it is necessary to say it.
I have noticed that most hon. Members who made the criticisms and who spoke in Committee and won the battle about whether there should be powers for three years or one year have not had the experience that I have had in representing an industrial area. I am sure that they are all financial wizards. I am sure that they all have very good brains and can argue about financial matters. However, different attitudes exist in an industrial area. I am devoted to most of my opponents in my part of the country and we have a very good relationship. However, most hon. Members who have spoken today have no idea about the problems of representing a highly industrial area. It is very much easier to put forward financial wizardry when one does not represent an industrial area. Probably in other types of area there are more people with financial knowledge who are not committed to trying to destroy the capitalist system and the present Government by strikes and demands for wages which would be almost impossible to accept.
My policy is simple. I want the Government to make as much money as they possibly can and then to divide it fairly. When that has been achieved, and when we are a modernised country—and I doubt whether so many of my hon. Friends who have spoken today will support me as much as I would wish—I shall want to see the money more evenly divided and given to people who have had much harder times in life than those experienced by most of my hon. Friends who have spoken today.

Mr. J. D. Concannon: Come over to this side of the House, love.

Dame Irene Ward: When the time comes, and if I still happen to be here before the next General Election, I shall produce a list to the Treasury setting out


what I want to see provided for the community. It will be better than the lists of my hon. Friends who have spoken today or the lists put forward by the Opposition. I know that they too have hearts, but sometimes their hearts do not agree with policies which will produce the money and satisfy people's hearts.
We have listened to all the blah about being able to have a debate in a year's time. If those hon. Members have taken an active interest in what has gone on recently they will realise that there are many people on the Labour benches as well as in the country who want to destroy not only the present Government but Parliament as well. I do not wish that to happen. I do not wish there to be a row every year in an attempt to reduce inflation. That would create a feeling among the public that they have no security. That would be an unwise position in which to place Parliament.
6.0 p.m.
I speak with the only thing I have to contribute to the debate—my experience in industrial constituencies—when I say that it is very much better to have the three-year period because then the general public, who are very interested in the Bill and support the Government wholeheartedly, will feel much more secure against the operations of militants. Even militants get bored, but if they have only a year in which to work they will not settle down but will continue to stir the pot, as they have been doing in the North East and in other industrial areas.
The country is longing for a time of peace during which we can get on top of inflation, as I am sure we will. The Government are right to stand by their three-year period. I would not give an inch of ground to any of the militants either in the House of Commons or in the country. I am speaking politically but from the country's point of view. If hon. Members opposite are on the Left wing of their party or on a more even keel it makes no difference to our personal relationships, but it makes a difference politically. In the same way, a lot of the Right-wingers on this side of the House are delightful people, but I would like them to come to the North East and stand up for their views in my area. I do not think they had penknives or even

chairs thrown at them, as I have, or that anyone has tried to drown them, as happened to me on one occasion. If that had happened to them, they would really know what the militants within industry and the trade union movement mean.
I hope that the Government will get an overwhelming vote in support of the amendment. The members of the present Government have some first-class knowledge compared with members of the Government in office when I first entered the House of Commons. I believe that members of the present Government are modern, up-to-date and likeable and I propose to support them. But I shall not do so solely because I like them. I shall do so because I believe that, in the struggle to deal with inflation, we have to ensure that the militants in the trade unions do not continue to try to destroy our capitalist system by making the goods we sell after we have modernised industry too expensive for our customers overseas to buy.
I do not want to talk for very long. I could talk for a long time, but I shall not. I will only say that, having listened to the speeches of my hon. Friends, I think, "My goodness! I would like them all to come and struggle with the militant industrial workers."

Mr. Ridley: I came and spoke for my hon. Friend at the last election, and we had an audience of three between the two of us.

Dame Irene Ward: I am delighted that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has intervened, because when he used to live in my part of the country he was very much on the Left—much more on the Left than I was. It was only when he went to Cirencester and Tewkesbury that he became such a Right-winger. I am sorry to have to say that it was very rude of people not to come and listen to him, but the fact is that they did not want to listen to him because they had made up their minds to vote for me and what he had to contribute would not have made any difference one way or the other. So all I have to say to him is that he would be better advised not to take me on, because I can deal with him.
We should support the Government's amendment in the interests of the vast majority of the people in the country, who are behind the Government, and in order to offset the many militants in the trade union movement in my part of the country. I get on well with the militants. They are awfully nice. [Laughter.] They are awfully nice. My hon. Friend the Member for Cirencester and Tewkesbury talked about heart, and his heart and blossom and things. The militants in my part of the country are awfully nice because, at the bottom of their hearts, I am glad to say, they know that when I think the Government are on the wrong track I jolly well say so.
Today I think that the Government are on the right track, and I am delighted that they are trying to restore the three-year period. I hope that they will have an overwhelming majority for doing so. I am delighted for once in a while to be on their side and—the only hon. Member on this side who has done so,—to have spoken in their favour.

Mr. Biffen: One of the sadnesses of the prospective Parliament is that we shall be deprived of the continuing, public and special relationship between my hon. Friends the Members for Tynemouth (Dame Irene Ward) and Cirencester and Tewkesbury (Mr. Ridley). I think that doubtless there is a very responsible case to be made for the views expressed by the Government today, and I hope that my hon. Friend the Member for Tynemouth will not take it amiss when I say that she, having said that she does not talk about subjects of which she has little or no knowledge, wisely desisted from arguing the merits of the amendment. Although the House enjoyed her closely-argued economic and social observations, they did not address themselves to what is essentially a constitutional issue. This is an issue of some substance and would have been seen as such in any previous Parliament. We would be betraying the trust and the traditions of this House if we shied away from the debate because of some of the present economic and social considerations referred to by my hon. Friend.
I thank my right hon. Friend the Secretary of State for the considerable altera-

tions he proposes in Clause 4. The debate has proceeded in a much more relaxed and good-natured atmosphere than it did upstairs. The atmosphere in Committee was always good-natured but it took on a certain degree of high drama when we were discussing the amendments to make Part II of the Bill annually renewable. At that point it seemed to me that the whole policy was being invested with an unfairly important significance.
Last night the hon. Member for Plymouth, Sutton (Dr. David Owen) said it was a recurring characteristic of Governments to place on prices and incomes policies loads that they could not reasonably bear. After all, my right hon. Friend said in Committee:
for it is the belief in our will to continue our policies that will make them acceptable.
Referring to Parliament, he added:
It has the responsibility of ensuring that continuation of the Government …"—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 627–8.]
I think that we have moved measurably and sensibly away from those considerations. What we are now confronted with is a policy which proposes that Part II of the Bill shall last for three years and then end. It is almost as though my right hon. Friend, with suitable apologies to St. Augustine, has said "Lord, make me perfect within three years."
There is a respectable case to be made for the 12-month annual renewal period without the terminal point of three years because this introduces a degree of rigidity into the whole voluntary character of the policy which one would not have expected to come from the lips of Treasury spokesmen during the proceedings in Committee. The House must still return to the constitutional aspects of this debate because of the nature of the agencies.
Clause 6 says that
The Price Commission shall exercise the powers conferred by this section in such a way as appears to them appropriate".
If the Committee had had before it the consultative document dealing with the guidance that is likely to be given to the agencies, I believe that the wide-ranging power conferred upon this somewhat extra-parliamentary body would have excited even more adverse comment than that which we then entertained. Leaving aside that constitutional aspect, there is


a point about the sheer practicality of our annual economic debates.
This was a point to which I referred in Committee and I make no apology for returning to it now before a wider audience. My right hon. Friend said that the amendment successfully moved in Committee by my hon. Friend the Member for Cirencester and Tewkesbury and myself ensured that the order renewing the powers under Part II of the Bill would come forward every March. We would be presented every spring with the prospect of a three-pronged economic debate.
The first prong would be the debate on the report of the Expenditure Committee. I must say that having the report of that Committee debated does not immediately, noticeably and necessarily have a direct impact upon the levels of public expenditure. There is, however, a growing understanding of the importance of public expenditure for the way in which the economy behaves but this takes no view at all of the desirability or otherwise of those levels of public expenditure. I say that for the benefit of my hon. Friend the Member for Tyne-mouth. The second prong is the Budget. Surely it must be wholly appropriate that once a year, when we are talking about public expenditure and taxation, we should have at least one debate dealing with the renewal of the wide-ranging powers conferred upon the executive and the agencies it uses for pay and prices.
Against this narrow but, I believe, highly respectable constitutional argument there have been set a number of other arguments that are somewhat extraneous in character. There is a sort of nursery food which is served up by the Whips' office for those whose diet lies in that direction. One of the arguments I have had come back to me is that it would be undesirable to have an annual debate because it would lead to an annual wrangle and we all know the difficulties created by the necessity annually to renew the Rhodesia sanctions order.
If anyone believes that it is the existence of Parliament's authority annually to renew Part II of the Bill which would result in prices and incomes legislation obtruding on to our political affairs, he lives in a world of complete and utter innocence. Prices and incomes policies

will be with us in a large measure from this moment onwards. Almost every action of the Government will be measured against what is believed to be one of the central features of their economic policy. So central a feature is it that it was launched in the most dramatic and novel fashion by my right hon. Friend the Prime Minister at Lancaster House.
6.15 p.m.
If we needed evidence of that we have only to think of the Private Notice Question on Monday dealing with the price of processed meats. This kind of constant and continual debate will run through our proceedings. Do not let anyone believe that somehow or other the subject will go away and we will thereby be disembarrassed if we can be excused having the right once a year to renew this order which is of such a fundamental economic and political character.
The second argument put around to counter the militant and disruptive arguments of my hon. Friends the Members for Cirencester and Tewkesbury and South Angus (Mr. Bruce-Gardyne) is that we need the three-year period to reach some kind of longer-term arrangement with the unions so that we can return to some form of tripartite arrangement involving the TUC and the CBI. This is the long march back to Downing Street. Vital to this proposition is the argument that we must somehow woo the moderates away from the militants.
These two propositions are closely interwined. They are not too publicly stated but I am certain that the argument is that if Parliament had to debate the order every year it would make it that degree more difficult for the Government to conduct their policies because in some way the militants would be encouraged. It is felt that Parliament and the Government would, presumably in the way in which they conducted the debate in March, create some uncertainty. There is the feeling that the trumpet would sound an uncertain note, encouraging militants to think that given one more push the policy would collapse.
We will discover that the search for trade union leaders who are willing to become subcontractors for Government policy is predestined to fail. Once trade


union leaders become subcontractors for Government policy they will in that process lose a great deal of the support of their members. Indeed, that was precisely the argument that we elaborated when we were sitting on the opposite side of the House. We have to ask ourselves whether the early experience of phase 2 has enhanced the moderate status of Mr. Alan Fisher or Mr. David Basnett. That is one early and simply test to apply.

Mr. Kenneth Lewis: Is not my hon. Friend making out the case for the present policy? "Subcontracting" is a powerful term. Is it not because of the lack of cooperation with a voluntary policy that we need this one?

Mr. Biffen: I will gladly deal with that point because, within the discipline set by this debate, when I come to my peroration I will state exactly what I believe to be the appropriate form of Clause 4 and relate that to the economic policy against which it could operate in my opinion. My hon. Friends must address themselves with immense caution to the proposition that we are engaged on a series of policies in which in our hearts we disbelieve because in the process we will woo away the moderate trade union leadership. In that direction ultimately lies food subsidies, control over interest rates and further concessions, as concessions they are, which will infringe those areas of economic freedom which are left after the application of the policy as it stands.
Notwithstanding those concessions, we cannot get away from the basic proposition that trade union leaders, particularly in today's social climate, are not expected by their members to become agents of the Government. If the CBI membership eventually begins to turn in its tracks, it will be merely the most mild and modest indication to us that many others will do likewise in respect of organised labour. I know that what I propose to say is immensely disagreeable to many of my hon. Friends, but there is a mood abroad which challenges traditional patterns of social order and traditional economic and social relationships.
The House must see how best society can bend, adjust and cope with the turbulence of the social change which is

self-evident in society today. We shall not be doing a service to this House or to society outside if we try to institutionalise trade union leadership, trade association leadership—that is really what the CBI is—and the Government into some kind of tripartite organising body for the economy. Yet that is the philosophy which lies behind the request for a three-year period uncluttered by annual parliamentary renewability.
I wish to bring my remarks to a conclusion and, in so doing, to deal with the point raised by my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), although not, I suppose, to his satisfaction. The condition on which this legislation can recommend itself to hon. Members on this side of the House, and possibly even to hon. Members opposite, is that it is to be seen as essentially short-term legislation. I am not setting any terminal date on its operation, but all the experience of prices and incomes legislation leads us to believe that it has the psychological effect of a short-term period.
That was certainly the view of the hon. Member for Ashton-under-Lyne (Mr. Sheldon), who said that repeated use of it had blunted even its effectiveness as a psychological instrument. But psychological instrument I believe it to be, and it will enable my right hon. and hon. Friends to contrive a Budget by which, in both their expenditure and taxation polices, it will be possible to have a net-borrowing requirement which is more related to the Government's genuine ability to borrow from the non-banking public. In those circumstances, the economic climate against which this legislation will have to operate will be altered to advantage. There would still remain Part I of the legislation—the institutions.
I point out to my hon. Friend the Member for Rutland and Stamford that the Conservative Government established the National Incomes Commission. In its reasoned amendment to the 1966 prices and incomes legislation the Conservative Party specifically avoided direct opposition to the establishment of the National Board for Prices and Incomes. As my hon. Friend will know, because he was with me in the Standing Committee which debated that legislation, we did not vote against Part I of that Bill which


established the board. The bodies set up by this Bill would still be in existence. The Pay Board may well prove to be a useful addition to the institutional arrangements available to the Government and, above all, help to determine the public sector levels of wages. That was the use made of the National Board for Prices and Incomes, particularly in connection with the pay of the Armed Forces.
All this adds up to a much more realistic assessment of what we can do with this legislation. It is a much more modest assessment than has been claimed for it by some of the more enthusiastic evangelists. I suppose that their recent conversion underlines their evangelism. But the danger of evangelism is that one decries those who have not suffered instant conversion. The remarks of my right hon. Friend the Secretary of State for Northern Ireland were probably incautious, but at least they were deliberate to the extent that they were contained in a Press release issued by the Conservative Central Office.
There is a danger that in our anxiety to promote the new policy we shall exacerbate perhaps just as much as mollify the social tensions and discords in society. I therefore hope that my right hon. and hon. Friends will retain annual renewability, not merely because it is what the constitutional situation requires and is wholly appropriate to a Parliament which retains some shred of self-respect but, above all, because it invests in the policy that element of modesty which is essential if it is to have any success.

Mr. John Page: In order not to allow the House to forget the distinctive flavour of the distinguished speech of my hon. Friend the Member for Oswestry (Mr. Biffen), I shall speak in shorthand and be very quick.
It is sad and embarrassing that the Government have found it necessary to introduce Amendment No. 3 and again to bring in the three-year period. However, we must be thankful that the Government have introduced Amendment No. 58, which means that at the end of the three years the legislation will die. As the Government have gone half way to meeting me in my dislike, I shall go half way to meeting them and abstain in

the vote instead of voting against them, as it was my original intention to do.
As I said on Second Reading, these measures can be effective, and the Government will do their best to ensure that they are effective, only if they last not more than about a year. If they last more than a year, if they last for two years or for the full period of three years, they will kill the freedom and enterprise which the Government say it is their purpose to defend. The detail and sophistication of the Green Paper are such, and their effect will embrace so many aspects of our business and industrial life, that if the Government try to block up loophole after loophole and screw down loose plank after loose plank for more than a year it will be very difficult for a Conservative Government or any other Government to release the controls. That is the greatest danger.
Apart from some control of investment and the appointment of the chairman, the new regulations give the Government more control over private industry, commerce, business and the professions than they have at ordinary times over the nationalised industries. That is extremely dangerous. It is said that phase 2 will last only until the autumn of this year. If that is so, what is the point of building up this great edifice of sophisticated bureaucrats, producing unbelievably complicated measures which will probably take three or four months to work through the system so that if a question is asked of one of the agencies it will probably be three or four months before an answer is given? It seems extremely hollow for the Government to say that this is only a temporary measure. That, again, is one of the things that cause dissatisfaction with allowing more than one year at a time before it comes back to the House for renewal.
6.30 p.m.
On a previous occasion, when the Labour Government were in office, my noble Friend the Lord Chancellor described that Government, who were spending a lot of money and also imposing restraints, as being like someone who turns on the gas under the kettle and then sits on the lid to ensure that it does not get blown off. That, he said, was a painful and undignified position. I regret to say that that seems to be the


position which the Government are now showing themselves to be in.
My right hon. Friend at the end of his speech said—I think I got his words down correctly—"it is the clear intention of a group of people inside the trade union movement to oppose Government policy by industrial action". He said that clearly, and he is right. But I would ask him: what real defence is there in the Counter-Inflation (Temporary Provisions) Act and what real defence is there in this Bill against trade union militancy? The present Act has done nothing except cause discomfort and bewilderment to my constituents, who are bewildered at the very packed underground trains this morning. What have those provisions done to renew the gas supply to their houses? What has the existing Act done which is going to open their places of work closed either by lack of power or by industrial action? What will it do to ensure that proper transport facilities are provided for them? My constituents and other people in the country will not be impressed when it appears that the Government are holding most fast to a proposition to change that part of the Bill which now says that the Bill should cease to have effect after a year and to replace it with a period three years long? It will be three years before it can be examined again by the House, which is a very unsatisfactory situation.

Mr. Benn: By leave of the House, I would say that this has been a very remarkable debate and, whatever may happen in the Division Lobbies, it should not pass without notice that with the exception of the hon. Lady the Member for Tynemouth (Dame Irene Ward) the Minister has really had no enthusiastic support from any one of the many speakers who have spoken since we entered upon this business at half-past three.
I wanted to appeal to the right hon. Gentleman, to ask him whether he would consider withdrawing his amendment, considering the arguments that have been put forward from both sides of the House, and, if necessary, have a further amendment introduced in another place, when he will have had time to take account of what has been said. I appeal to him that he should do that rather than persist

with an amendment which clearly does not command the support of those who have been present at and listened to the debate.

Mr. Maurice Macmillan: I am not at all sure that the right hon. Member for Bristol, South-East (Mr. Benn) is correct in saying that a number of my hon. Friends who have spoken in this debate, using the terms they did, are necessarily representative of the views of others of my hon. Friends who have not spoken in this debate.
The hon. Member for Liverpool, Walton (Mr. Heffer) I think summarised the debate, or some parts of it, in referring to the problem of the Government as being what he called an attempt to control the capitalist system. This was expressed in the debate as an argument, on the one hand, between liberalism and repression, or Socialism and capitalism, on the other hand. I think that to some extent on this side it was an argument whether the Conservative Party is Whig or Tory.
I was very glad to have the far from silent support of my hon. Friend the Member for Tynemouth (Dame Irene Ward) on the Tory side. I think she was quite right in saying that a great deal of the debate went on to fields not primarily concerned with or relevant to this amendment or the duration of stage 2 but dealt with matters which will be raised, as she said, in the Budget debate.
In this context I would assure my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) that this Bill does not seek by any means to hand over control of the whole economy to the Government or to the agencies.
Again in this context I would say first of all to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) that we have never considered that these policies should be alone in the control of inflation, and, although it would be out of place for me to go into that now, I would accept the importance of the control of public expenditure and the role of monetary policy in the control of public expenditure. However, I do not think that that line of argument is relevant to the difference between a one-year or three-year duration of the Bill.
The second point made by my hon. Friend was about the stringency of the


Bill in relation to profits, and my hon. Friend the Member for Horsham (Mr. Hordern) made the same point. I must point out, though I shall return to this question of profits later, that my hon. Friend was referring to the code for stage 2 only rather than to the powers contained in the Bill itself. He implied that stage 2 would go on for three years. This is one of the major arguments against the three-year period. I can assure him that the Government have not changed their position or their concept at all on stage 2. The whole point of it and the reason for this debate is that the policy in stage 2 is to move to stage 3. From the very beginning—it is nothing new—we have made it plain that we are prepared to consider some of the anomalies which may—which obviously will—arise from the standstill and in stage 2.

Mr. Joel Barnett: Is the right hon. Gentleman telling us that the code for phase 3 will be very different from the present one before us?

Mr. Macmillan: No. I am not saying anything of the sort. I was merely pointing out that this consultative document, this draft, is for stage 2 only.
I would say to my hon. Friend the Member for Harrow, West (Mr. John Page) that I am grateful for his sort of modified lack of support. [Laughter.] I was not quite sure which way round to put it. I would tell him that there is not going to be any vast bureaucracy. We have already said that the number of people on the agencies will be some 700. The point is that these are agencies and their object is to act.
Quickly to deal with the third point which my hon. Friend the Member for South Angus made when he was referring to Europe—so far as his arguments were relevant, they were relevant to the code rather than the Bill—European Coal and Steel Community products as defined in the Treaty of Paris are excluded from price control in the code, and the appendix in the White Paper also exempts goods and services where prices are regulated as a result of international agreement or arrangement. I hope that that makes the position clear to my hon. Friend.
Article 85 of the treaty relates to agreements and concerted practices by under-

takings affecting trade between member States and distorting competition within the Common Market. Firms complying with any general price restriction made by the Price Commission would not be doing anything prohibited by Article 85. Article 86 is concerned only with actions of large monopolies, and, like Article 85, it refers to the improper exploitation by the undertakings themselves rather than to anything done by a national regulatory body such as the Price Commission. So the conflict my hon. Friend was afraid of does not arise.
There have been three main arguments. First, there is the argument of accountability, to which my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) and the hon. Member for Salford, West (Mr. Orme) referred. My right hon. Friend implied that the termination of the Bill on 31st March 1976 made no difference. His argument in favour of an annual order took no account of the considerable improvements which were made in Committee, partly by my hon. Friends and partly by hon. Gentlemen on the Labour benches. In Committee it was made clear that it would be possible to answer parliamentary questions on individual cases. The publication of orders, notices and consents, and the institution of quarterly debates on reports of the agencies more than meet the case made by my right hon. Friend, especially in the light of the wise remark made by the hon. Member for Salford, West that the effect of a debate is frequently not on the issues immediately debated but on the future conduct of the Government. I agree with him. A quarterly debate on an agency's report to Ministers which is available to the House is likely to be as effective an instrument of parliamentary control and accountability as a debate once a year on an order renewing the powers.
My hon. Friend the Member for Oswestry (Mr. Biffen), who has strong and justifiable feelings on the constitutional issue, suggested that a debate once a year on an order to renew stage 2 achieves closer constitutional control than can he achieved by debating the quarterly report and the draft code. Hon. Members who have spoken in this way have not taken account of the full effect of the arrangements that have already been made to


improve parliamentary control accountability.

Mr. Orme: Does not the right hon. Gentleman agree that there is a great deal of difference between quarterly debates on a report on which Parliament will have no sanction, and a yearly debate in which the House, if necessary, can vote either to reverse or continue the policy?

Mr. Macmillan: I do not think there is—certainly not in the terms of my hon. Friend's argument. The rejection by the House of an agency's report would have as profound an effect on the Government of the day as the rejection of any other measure.

Mr. Heffer: Can the right hon. Gentleman guarantee a quarterly debate?

Mr. Macmillan: The agencies will report quarterly. That has not yet been written into the Bill; it is the subject of a future amendment. I gave an undertaking that the Bill would be amended to include provision for a quarterly report.

Mr. Heffer: And a quarterly debate?

Mr. Macmillan: That will be arranged through the usual channels. Ministers will be susceptible to the ordinary pressures of the House.
I do not think that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) fully believes that the agencies are immune from parliamentary influence or control, or that the three-year period will somehow increase their degree of immunity. The suggestion he made would not add to the degree of accountability of the agencies to Parliament. He appealed as much to Parliament as to the Government to face the realities of public expenditure. My hon. Friend the Member for Tynemouth pointed the dilemma which he put to the House.
6.45 p.m.
The second main criticism of the three-year period was that it would lead inevitably to Socialism. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the involvement of Government in industry; but all Governments since the war in some degree have had to involve themselves in industry and to accept the limitations of a mixed economy. It is

nonsense to suggest that intervention of this kind equates with Socialism.
My hon. Friend the Member for South Angus goes too far in calling three years a life sentence for the market economy and in saying that it involves an irreversible degree of market distortion. As the hon. Member for Ashton-under-Lyne said, before setting up our system we consulted the United States and other countries and took into account the lessons they had learnt. Those countries also took into account the lessons they had learnt from other countries and the lessons of the Second World War and the Korean War. The decision to concentrate on the major companies was designed to lessen the degree of bureaucracy, and there is no question that the adoption of this feature of the United States system will allow future Governments to command the heights of Socialism.
The Government are not despairing of the free enterprise system. I am sure that all my right hon. and hon. Friends are convinced that whatever deficiencies it may have in some aspects—and no system is perfect—free enterprise and the profit motive bring success in generating economic growth and prosperity for the people.
I have not had time to see the full version of the Opposition's alternative, but one has heard stories. It is the Opposition's alternative which despairs of free enterprise and which, if put into effect, would cripple the private sector.
Although, admittedly, our means have altered, our objectives have been consistent over the last two-and-a-half years. Our objectives are the achievement of a sustained level of growth and a higher prosperity in real terms. To attain those objectives we have reduced taxation to an unprecedented degree and raised the level of social benefits. We have passed the Industry Act and we are trying to develop regional policies and regional regeneration on an unprecedented scale. I place the whole counter-inflation programme and the formulation of the code in the context of growth. I recognise the importance of profit for expansion and investment and in securing full employment. The code does not prevent increase in profit deriving from expansion. The code is framed not to distort the


market but to ensure the maximum degree of flexibility for enterprise in determining a prices control policy which is consistent with the overriding need to reduce the rate of inflation.
Of course there is less flexibility in stage 2. That is why it lasts only until the autumn. My right hon. Friend the Member for Thirsk and Malton asked for an annual renewal, but it is the code that will be the effective instrument of the agencies, and the draft code will come before the House and be debated before the affirmative resolution procedure.

Mr. Peter Trew: Will my right hon. Friend tell us what form the debate on the code will take? Will it be on a motion to take note of the code? If the House voted against the motion, would the result be that the Government's prices and incomes policy would be in suspense until such time as the code was again submitted to the House and approved?

Mr. Macmillan: I should not like to be precise about the form the debate would take. All that the Government and I have done has been to give an undertaking that a future code will always be debated in draft before it is the subject of a debate on the affirmative resolution. That is to give an occasion for noting the

opinion of the House and for the possibility of alteration. It is the debate on the affirmative resolution which, if the code were to act, the Government would have to carry.

Those who have opposed these amendments have been fundamentally opposed to or deeply sceptical about the policy as a whole, and that is why they wish to limit the period to one year. But it is because I believe that, however regrettable some may find it, we must be seen to be firm that I ask the House to accept the amendments.

Unlike my hon. Friend the Member for Oswestry, I do not despair of resuming a dialogue with the unions, nor do I believe that in the absence of such dialogue we should refrain from action ourselves. I remind my hon. Friend that even in the Standing Committee I placed greater emphasis on the three-year period than on any other aspect. In doing so I quoted him, and I quote him again, as saying that inflation is not only about experience but about expectation. There is a strong psychological element involved in it.

Question put, That the amendment be made:—

The House divided: Ayes 276, Noes 218.

Division No. 71.]
AYES
[6.52 p.m.


Adley, Robert
Butler, Adam (Bosworth)
Elliot, Capt. Walter (Carshalton)


Alison, Michael (Barkston Ash)
Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Elliott, R. W. (N'c'tle-upon-Tyne, N.)


Allason, James (Hemel Hempstead)
Carlisle, Mark
Emery, Peter


Amery, Rt. Hn. Julian
Carr, Rt. Hn. Robert
Eyre, Reginald


Archer, Jeffrey (Louth)
Channon, Paul
Farr, John


Astor, John
Chapman, Sydney
Fenner, Mrs. Peggy


Atkins, Humphrey
Chataway, Rt. Hn. Christopher
Fidler, Michael


Awdry, Daniel
Chichester-Clark, R.
Finsberg, Geoffrey (Hampstead)


Baker, Kenneth (St. Marylebone)
Churchill, W. S.
Fisher, Nigel (Surbiton)


Baker, W. H. K. (Banff)
Clark, William (Surrey, E.)
Fletcher-Cooke, Charles


Balniel, Rt. Hn. Lord
Clarke, Kenneth (Rushcliffe)
Fookes, Miss Janet


Batsford, Brian
Clegg, Walter
Fortescue, Tim


Beamish, Col. Sir Tufton
Cockeram, Eric
Foster, Sir John


Bennett, Dr. Reginald (Gosport)
Cooke, Robert
Fowler, Norman


Benyon, W.
Coombs, Derek
Fox, Marcus


Berry, Hn. Anthony
Cooper, A. E.
Fry, Peter


Biggs-Davison, John
Cormack, Patrick
Galbraith, Hn. T. G. D.


Blaker, Peter
Costain, A. P.
Gardner, Edward


Boardman, Tom (Leicester, S.W.)
Critchley, Julian
Gibson-Watt, David


Boscawen, Hn. Robert
Crouch, David
Gilmour, Ian (Norfolk, C.)


Bossom, Sir Clive
Crowder, F. P.
Gilmour, Sir John (File, E.)


Bowden, Andrew
Davies, Rt. Hn. John (Knutsford)
Glyn, Dr. Alan


Braine, Sir Bernard
d'Avigdor-Goldsmid, Sir Henry
Godber, Rt. Hn. J. B.


Bray, Ronald
d'Avigdor-Goldsmid, Maj.-Gen.Jack
Goodhart, Philip


Brewis, John
Dean, Paul
Goodhew, Victor


Brinton, Sir Tatton
Deedes, Rt. Hn. W. F.
Gorst, John


Brocklebank-Fowler, Christopher
Dixon, Piers
Gower, Raymond


Brown, Sir Edward (Bath)
Dodds-Parker, Sir Douglas
Grant, Anthony (Harrow, C.)


Bryan, Sir Paul
Drayson, G. B.
Gray, Hamish


Buchanan-Smith, Alick (Angus, N&amp;M)
du Cann, Rt. Hn. Edward
Green, Alan


Buck, Antony
Dykes, Hugh
Grieve, Percy


Bullus, Sir Eric
Eden, Rt. Hn. Sir John
Griffiths, Eldon (Bury St. Edmunds)


Burden, F. A.
Edwards, Nicholas (Pembroke)
Grylls, Michael




Gummer, J. Selwyn
McMaster, Stanley
St. John-Stevas, Norman


Gurden, Harold
Macmillan, Rt. Hn. Maurice (Farnham)
Sandys, Rt. Hn. D.


Hall, Miss Joan (Keighley)
McNair-Wilson, Michael
Scott, Nicholas


Hall, John (Wycombe)
McNair-Wilson, Patrick (New Forest)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hall-Davis, A. G. F.
Maddan, Martin
Shelton, William (Clapham)


Hamilton, Michael (Salisbury)
Madel, David
Shersby, Michael


Hannam, John (Exeter)
Maginnis, John E.
Simeons, Charles


Harrison, Brian (Maldon)
Marples, Rt. Hn. Ernest
Sinclair, Sir George


Harrison, Col. Sir Harwood (Eye)
Marten, Neil
Skeet, T. H. H.


Haselhurst, Alan
Mather, Carol
Soref, Harold


Hastings, Stephen
Maudling, Rt. Hn. Reginald
Speed, Keith


Havers, Sir Michael
Mawby, Ray
Spence, John


Hayhoe, Barney
Maxwell-Hyslop, R. J.
Sproat, Iain


Heath, Rt. Hn. Edward
Miscampbell, Norman
Stainton, Keith



Mitchell, Lt.-Col. C. (Aberdeenshire, W)



Heseltine, Michael

Stanbrook, Ivor


Hicks, Robert
Moate, Roger
Stewart-Smith, Geoffrey (Belper)


Higgins, Terence L.
Molyneaux, James
Stodart, Antnony (Edinburgh, W.)


Hiley, Joseph
Money, Ernie
Stoddart-Scott, Col. Sir M.


Hill, John E. B. (Norfolk, S.)
Monks, Mrs. Connie
Stuttaford, Dr. Tom


Hill, James (Southampton, Test)

Sutcliffe, John


Holland, Philip
Montgomery, Fergus
Tapsell, Peter


Holt, Miss Mary
More, Jasper
Taylor, Sir Charles (Eastbourne)



Morgan-Giles, Rear-Adm.



Hornby, Richard
Morrison, Charles
Taylor, Edward M. (G'gow, Cathcart)


Hornsby-Smith, Rt. Hn. Dame Patricia
Mudd, David
Taylor, Frank (Moss Side)


Howe, Rt. Hn. Sir Geoffrey
Nabarro, Sir Gerald
Tebbit, Norman


Howell, David (Guildford)
Neave, Airey
Temple, John M.


Hunt, John
Nicholls, Sir Harmar
Thatcher, Rt. Hn. Mrs. Margaret


Hutchison, Michael Clark
Noble, Rt. Hn. Michael
Thomas, Rt. Hn. Peter (Hendon, S.)


Iremonger, T. L.
Normanton, Tom
Thompson, Sir Richard (Croydon, S.)


Irvine, Bryant Godman (Rye)
Nott, John
Tilney, John


James, David
Onslow, Cranley
Trafford, Dr. Anthony


Jenkin, Patrick (Woodford)
Oppenheim, Mrs. Sally
Trew, Peter


Jennings, J. C. (Burton)
Orr. Capt. L. P. S.
Tugendhat, Christopher


Jessel, Toby
Osborn, John
van Straubenzee, W. R.


Johnson Smith, G. (E. Grinstead)
Owen, Idris (Stockport, N.)
Vaughan, Dr. Gerard


Jones, Arthur (Northants, S.)
Page, Rt. Hn. Graham (Crosby)
Vickers, Dame Joan


Jopling, Michael
Parkinson, Cecil
Waddington, David


Kaberry, Sir Donald
Peel, Sir John
Walder, David (Clitheroe)


Kellett-Bowman, Mrs. Elaine
Percival, Ian
Walker, Rt. Hn. Peter (Worcester)


Kilfedder, James
Peyton, Rt. Hn. John
Walker-Smith, Rt. Hn. Sir Derek


Kimball, Marcus
Pink, R. Bonner
Wall, Patrick


King, Tom (Bridgwater)
Price, David (Eastleigh)
Walters, Dennis


Kinsey, J. R.
Prior, Rt. Hn. J. M. L.
Ward, Dame Irene


Kitson, Timothy
Proudfoot, Wilfred
Warren, Kenneth


Knight, Mrs. Jill
Pym, Rt. Hn. Francis
Weatherill, Bernard


Knox, David
Raison, Timothy
Wells, John (Maidstone)


Lambton, Lord
Ramsden, Rt. Hn. James
White, Roger (Gravesend)


Lamont, Norman
Rawlinson, Rt. Hn. Sir Peter
Wiggin, Jerry


Lane, David
Redmond, Robert
Wilkinson, John


Langford-Holt, Sir John
Reed, Laurance (Bolton, E.)
Winterton, Nicholas


Le Marchant, Spencer
Rees, Peter (Dover)
Wolrige-Gordon, Patrick


Lewis, Kenneth (Rutland)
Rees-Davies, W. R.
Wood, Rt. Hn. Richard


Lloyd, Rt. Hn. Geoffrey(Sut'nC'field)
Renton, Rt. Hn. Sir David
Woodnutt, Mark


Longden, Sir Gilbert
Rhys Williams, Sir Brandon
Worsley, Marcus


Loveridge, John
Ridsdale, Julian
Wylie, Rt. Hn. N. R.


Luce, R. N.
Roberts, Michael (Cardiff, N.)
Younger, Hn. George


McAdden, Sir Stephen
Rodgers, Sir John (Sevenoaks)



McCrindle, R. A.
Rossi, Hugh (Hornsey)
TELLERS FOR THE AYES:


McLaren, Martin
Rost, Peter
Mr. Paul Hawkins and


Maclean, Sir Fitzroy
Russell, Sir Ronald
Mr. Oscar Murton.




NOES


Abse, Leo
Brown, Ronald (Shoreditch &amp; F'bury)
Cunningham, G. (Islington, S.W.)


Allaun, Frank (Salford, E.)
Bruce-Gardyne, J.
Dalyell, Tam


Archer, Peter (Rowley Regis)
Buchan, Norman
Davies, Denzil (Llanelly)


Ashley, Jack
Butler, Mrs. Joyce (Wood Green)
Davis, Clinton (Hackney, C.)


Atkinson, Norman
Callaghan, Rt. Hn. James
Davis, Terry (Bromsgrove)


Barnes, Michael
Cant, R. B.
Deakins, Eric


Barnett, Guy (Greenwich)
Carmichael, Neil
de Freitas, Rt. Hn. Sir Geoffrey


Barnett, Joel (Heywood and Royton)
Carter, Ray (Birmingh'm, Northfield)
Delargy, Hugh


Beaney, Alan
Carter-Jones, Lewis (Eccles)
Dell, Rt. Hn. Edmund


Benn, Rt. Hn. Anthony Wedgwood
Castle, Rt. Hn. Barbara
Dempsey, James


Bidwell, Sydney
Clark, David (Colne Valley)
Douglas, Dick (Stirlingshire, E.)


Biffen, John
Cocks, Michael (Bristol, S.)
Douglas-Mann, Bruce


Blenkinsop, Arthur
Cohen, Stanley
Driberg, Tom


Boardman, H. (Leigh)
Coleman, Donald
Duffy, A. E. P.


Body, Richard
Concannon, J. D.
Dunn, James A.


Booth, Albert
Corbet, Mrs. Freda
Eadie, Alex


Bottomley, Rt. Hn. Arthur
Cox, Thomas (Wandsworth, C.)
Edeiman, Maurice


Boyden, James (Bishop Auckland)
Crawshaw, Richard
Edwards, Robert (Bilston)


Bradley, Tom
Cronin, John
Edwards, William (Merioneth)


Broughton, Sir Alfred
Crosland, Rt. Hn. Anthony
Ellis, Tom


Brown, Hugh D. (G'gow, Provan)
Crossman, Rt. Hn. Richard
English, Michael







Evans, Fred
Lestor, Miss Joan
Roberts, Albert (Normanton)


Faulds, Andrew
Lewis, Arthur (W. Ham, N.)
Roberts, Rt. Hn. Goronwy (Caernarvon)


Fisher, Mrs. Doris(B'ham, Ladywood)
Lewis, Ron (Carlisle)
Robertson, John (Paisley)


Filch, Alan (Wigan)
Lipton, Marcus
Roderick, Caerwyn E. (Brc'n&amp;R'dnor)


Fletcher, Raymond (Ilkeston)
Lomas, Kenneth
Roper, John


Foot, Michael
Lyon, Alexander W. (York)
Rose, Paul B.


Ford, Ben
Lyons, Edward (Bradford, E.)
Rowlands, Ted


Forrester, John
Mabon, Dr. J. Dickson
Sheldon, Robert (Ashton-under-Lyne)


Fraser, Rt. Hn. Hugh(St'fford &amp; Stone)
McBride, Neil
Shore, Rt. Hn. Peter (Stepney)


Fraser, John (Norwood)
McGuire, Michael
Short, Mrs. Renée (W'hampton, N.E.)


Freeson, Reginald
Mahon, Simon (Bootle)
Silkin, Rt. Hn. John (Deptford)


Galpern, Sir Myer
Mallalieu, J. P. W. (Huddersfield, E.)
Silkin, Hn. S. C. (Dulwich)


Gilbert, Dr. John
Marks, Kenneth
Sillars, James


Ginsburg, David (Dewsbury)
Marquand, David
Silverman, Julius


Grant, John D. (Islington, E.)
Marshall, Dr. Edmund
Skinner, Dennis



Mason, Rt. Hn. Roy



Griffiths, Eddie (Brightside)

small, William


Griffiths, Will (Exchange)
Meacher, Michael
Smith, John (Lanarkshire N.)


Grimond, Rt. Hn. J.
Mellish, Rt. Hn. Robert
Spearing, Nigel


Hamilton, James (Bothwell)
Mendelson, John
Spriggs, Leslie


Hamilton, William (Fife, W.)
Mikardo, Ian
Stallard, A. W.



Millan Bruce



Hardy, Peter
Miller, Dr. M. S.
Steel, David


Hattersley, Roy
Milne, Edward
Stewart, Rt. Hn. Michael (Fulham)


Healey, Rt. Hn. Denis
Mitchell, R. C. (S'hampton, Itchen)
Stoddart, David (Swindon)


Heffer, Erie S.
Molloy, William
Stonehouse, Rt. Hn. John


Hooson, Emlyn
Morgan, Elystan (Cardiganshire)
Strauss, Rt. Hn. G. R.


Houghton, Rt. Hn. Douglas
Morris, Alfred (Wythenshawe)
Summerskill, Hn. Dr. Shirley


Howell, Denis (Small Heath)
Morris, Charles R. (Openshaw)
Swain, Thomas


Huckfield, Leslie
Morris, Rt. Hn. John (Aberavon)
Thomas, Rt. Hn. George (Cardiff, W.)


Hughes, Rt. Hn. Cledwyn (Anglesey)
Mulley, Rt. Hn. Frederick
Thomas, Jeffrey (Abertillery)


Hughes, Roy (Newport)
Murray, Ronald King
Thorpe, Rt. Hn. Jeremy


Hunter, Adam
Oakes, Gordon
Tomney, Frank


Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Ogden, Eric
Tope, Graham


Janner, Greville
O'Halloran, Michael
Torney, Tom


Jay, Rt. Hn. Douglas
O'Malley, Brian
Tuck, Raphael


Jeger, Mrs. Lena
Oram, Bert
Varley, Eric G.


Jenkins, Hugh (Putney)
Orbach, Maurice
Wainwright, Edwin


John, Brynmor
Orme, Stanley
Walden, Brian (B'm'ham, All Saints)


Johnson, James (K'ston-on-Hull, W.)
Owen, Dr. David (Plymouth, Sutton)
Walker, Harold (Doncaster)


Johnson, Walter (Derby, S.)
Padley, Walter
Wallace, George


Jones, Barry (Flint, E.)
Palmer, Arthur
Weitzman, David


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Pardoe, John
Wells, William (Walsall, N.)


Jones, Gwynoro (Carmarthen)
Parker, John (Dagenham)
Whitehead, Phillip


Jones, T. Alec (Rhondda, W.)
Parry, Robert (Liverpool, Exchange)
Whitlock, William


Judd, Frank
Pavitt, Laurie
Willey, Rt. Hn. Frederick


Kaufman, Gerald
Peart, Rt. Hn. Fred
Williams, Alan (Swansea, W.)


Kelley, Richard
Perry, Ernest G.
Williams, Mrs. Shirley (Hitchin)


Kerr, Russell
Powell, Rt. Hn. J. Enoch
Wilson, Alexander (Hamilton)


Kinnock, Neil
Prentice, Rt. Hn. Reg.
Wilson, William (Coventry, S.)


Lambie, David
Probert, Arthur



Lamborn, Harry
Rankin, John
TELLERS FOR THE NOES:


Latham, Arthur
Rees, Merlyn (Leeds, S.)
Mr. Tom Pendry and


Lawson, George
Rhodes, Geoffrey
Mr. Walter Harrison.


Lee, Rt. Hn. Frederick
Richard, Ivor

Question accordingly agreed to.

Amendment made: No. 58, in line 36, leave out subsections (2) to (5) and insert:
'(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.
(3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.
(4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.'—[Mr. Kenneth Baker.]

Clause 6

POWERS OF PRICE COMMISSION

Mr. Pardoe: I beg to move Amendment No. 27, in page 4, line 39, at end insert:

?and shall publish at intervals of not less than one month reports showing why their exercise of these powers appeared to them appropriate for such purposes'.

Mr. Speaker: I suggest that we also discuss Amendments No. 28, in line 39, at end insert:
'and shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers',
No. 30, in Clause 7, page 5, line 29, at end insert:
'and shall publish at intervals of not less than one month reports showing why the exercise of these powers appears to them appropriate for such purposes',
No. 37, in line 29, at end add:
'and shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers',


and Government Amendment No. 17 to Schedule 1.

Mr. Pardoe: Yesterday we debated suggestions of how to get the aims and achievements of the policy into the shops, how to get shops to co-operate in achieving those aims, and how to gain the public's co-operation at the point of sale. The Government refused what both Liberal and Labour Members thought was a reasonable proposal for public participation. The Government offered unconvincing reasons for refusing this request. But the matter does not end there.
The public have still to be won over to whatever prices and incomes policy is in operation. Whatever Government introduce the policy, whatever kind of policy it may be, it must still be acceptable to the public if the public as a whole and industry are to co-operate in its aims.
The hon. Member for Oswestry (Mr. Biffen) last night rejected the idea that the nation was in a state of crisis, and I agree with him. We may not be there yet, but that does not mean to say that we shall not get there. The only way to ensure that we do not reach that situation is to analyse public support for democratic means of dealing with inflation, rather than wait for public frustration to build up to a point at which people begin to demand strong men to take strong actions and bring in anti-democratic measures.
The agencies which the Government are to create under this Bill are very powerful bodies, and among their powers they have the power of discretion. Now that we have seen the code we know just how much discretion they will have. It is inevitable that, unless a prices and incomes policy is extremely rigid, there will be built into it this kind of flexibility. The policy advocated by the Labour Party in a document issued today jointly with the TUC emphasises that price control under Labour would be flexible. Inevitably, there will be great discretion with the Minister or with the body which Parliament sets up to do his dirty work for him.
Clause 6(1) spells out the matter clearly. It says:
The Price Commission shall exercise the powers conferred by this section in such ways as appear to them appropriate for the purpose

of ensuring that the provisions of the code which concern prices and charges are implemented.
We must note that it is not Parliament or the courts which are being asked to exercise these powers in such a way as appears to them to be appropriate, but an ad hoc body. Therefore, it is absolutely essential that as this body goes along making these discretionary decisions—decisions of interpretation which in the past we would normally have left to the courts—it must come to the public and tell them how the powers are being exercised. There is plenty of scope for an infinite number of discretionary decisions about what it means in each and every case.
The whole purpose of Amendment No. 27 is to ensure that the Pay Board and Price Commission report regularly. It does not matter whether they report to the Secretary of State and he then places the report before Parliament, so long as the public, the Press and Parliament are able to comment upon it. In Committee the Minister gave us some reassurances on this matter of reports. But I did not feel that those reassurances went far enough, were wide enough or were satisfactory. What I want to know is just how often these agencies will report to the public, exactly how they will report and what kind of reports they will make.
The Price and Pay Code says, for instance, that price reductions must fully reflect any fall in costs. Clearly, we need to know in the early stages of the policy how far the Price Commission has been able to fulfil that instruction, what it has done to achieve it, and how far it has been achieved.
One of the Pay Board's instructions is to facilitate a relative improvement of the low paid. That is an aim for any prices and incomes policy that we will all share. But again we need to know how the board is carrying out that instruction, how far it has been successful in doing it, and whether it has succeeded during the working of this part of the policy in ensuring that there is a relative improvement of the low paid. We shall also need to know what steps the board is taking to ensure that it happens in the future.
We need regular reports, to Parliament, of course, because the agencies have to


be made accountable to us, and also to the public, because the public has to be brought into the working of the policy and into participating in it. I want reports not just on the general aspects of the policy, though it will be essential in the early stages to have monthly reports on the general aspects. But we also need specific reports on individual aspects of it such as the two to which I have referred dealing with price reductions in relation to falling costs and the relative improvement of the low paid.
Amendment No. 27 simply calls for regular reports from the Price Commission. One of the other amendments linked with it calls for similar reports to be published by the Pay Board at monthly intervals. But two of the other amendments linked with it refer to public hearings. Amendment No. 28, for example, says:
The Price Commission … shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers.
There is a certain parallel here in the setting up of the Income Tax Commissioners.
It seems to me right that there should be some appeal procedure which is not exactly a full court of law. This possibility was raised in Committee by the hon. Member for Horncastle (Mr. Tapsell). But before even getting to that appeal procedure it is essential that the principles of the policy should be heard in public and that the board should have to answer in public any arguments put to it.
Public hearings were a major part of the early stages of the American policy. We heard last night from the Chief Secretary that what was in the early stages of the American policy did not necessarily have to be enshrined in our policy. I accept that. In some senses there is too much Americanisation of our prices and incomes policy. But in this case there is substantial evidence to show that the public hearings brought the public into the whole business of policing prices and participating in those aspects of the policy referring to pay and dividends.
7.15 p.m.
We had the instance of the Wilberforce Committee which sat in public. The Press and the public were able to attend. There was room for them. It would have been

possible, and I hope it will be in the future, to hold meetings of this sort, rather than in the sense of Congressional hearings in America, and to have the full panoply of Press and television brought to bear on them.
If we are to have the Ford workers arguing their detailed, carefully worked out and sophisticated case to the Pay Board, why not have those arguments put in public? They may be put in writing, of course. But shall we be able to see it happening and see the cross-questioning between the so-called guardians of the public interest and the specific interests of the group making the application or the company which is making the application to increase its profits or put up its prices?
I have said that these meetings would be a considerable part of the policy, and I hope that the Government will be able to say that they intend that at least some meetings of the board will be held in public even if they cannot go the whole way with me and insist that these meetings should be held at three-monthly intervals. I suggest that they should not all he in London. They should be around the country. This again was a feature of the American policy, where there was almost a touring road show of public hearings by the various agencies set up under the Nixon policy. I should prefer to see none of these hearings in London. I should be delighted to see them all around the country. This again would bring the focus of public attention to bear on the way to fight inflation and defeat it.
The board and the commission are being given very substantial powers of discretion. We are entitled to ask how they are to exercise that discretion. If the public are to participate in the working of the policy—and it will not work without public participation—we need also to know exactly how it is being done, how the Price Commission thinks it is fighting price increases and how the Pay Board thinks it is fighting pay increases.
I view this policy not as one who is unsympathetic to the idea of a statutory prices and incomes policy. I was amazed to see that the Conservative candidate in the Lincoln by-election was arguing yesterday, if this morning's Press is to be believed, that the Government of a party


which did not hold in principle with a prices and incomes policy had a better chance of succeeding with one than one which did. I seem to represent the only party in this House which accepts the principle of a statutory prices and incomes policy.
I believe that these proposals are important to the working of this policy. Unless we get it to work we shall have to fall back on the views of the right hon. Member for Coventry, East (Mr. Cross-man) in his extraordinary article in The Times this morning, where he said that it was all hopeless and that there was nothing we could do about it. He was virtually implying that the unions were too tough for a Labour Government and too tough for a Conservative Government, so what help could we get from a policy of this kind. He went on:
And if it doesn't work? Well, then the inflation must proceed until it hurts so much that we all insist on it being stopped. West German inflation is now within bounds because a sufficient number of Germans have seen the Deutsche Mark lose its value twice in a lifetime and don't want to see it happen again. It is quite possible that we shall have to accept something like the German experience.
I hope that we do not have to accept anything like the German experience which came as a result of the pre-war inflation.
It is for those reasons that I support a prices and incomes policy, and a statutory one. I want to see this policy work whether it is implemented by a Conservative or a Labour Government. The Government did not accept my proposals for improvement yesterday. I hope that the Minister will be able to come some way towards us today and accept at least the spirit enshrined in these two parallel amendments.

Mr. Michael English: I have not hitherto spoken in these debates, for the simple reason that I knew that many of my colleagues on both sides of the House were deeply interested in the matter and wanted to take part in them.
I congratulate the hon. Member for Cornwall, North (Mr. Pardoe) on putting forward what is obviously a desirable amendment to the clause, under which the Price Commission is given vast powers. This is setting a precedent for any party which in the future wishes to interfere with the workings of private enterprise,

and I am grateful to hon. Gentlemen opposite for having brought in this provision. It may be useful in the future.
Subsection (2) says:
For the said purpose the Price Commission may restrict any prices or charges for the sale of goods or the performance of services in the course of business, where the relevant transaction is effected at a time when this part of this Act is in force.
That is arrant nonsense. It is a stark, staring, raving untruth. The Government are purporting to give to the Price Commission a power which they do not have the authority to give and which the House has no authority to give so long as the European Communities Act is in force.
There was a long discussion in Committee under Clause 8 on the relationship between the Bill and the European Communities Act. The Chief Secretary said:
It is questionable—and here I must leave it as a question, because it is not one which admits of a categorical answer—whether merely to take the power, even if it were not to be used, would not of itself amount to a breach of Community obligations. Certainly to use the power, if it were contrary to our Community obligations, would obviously ipso facto contravene those obligations.
The hon. Gentleman went on to say that it was not his intention to break the European Communities Act and the Treaties of Rome, Paris and Luxembourg, and he believed that the Bill, so far as it could constitutionally be achieved, did not do that, but he then said:
I am bound to tell the right hon. Gentleman that those qualifying words must go in".—[OFFICIAL REPORT, Standing Committee H, 15th February 1973; c. 736.]
I realise that this may seem to be not relevant to the clause, but I think I am leading my argument into it. The reason why the Chief Secretary cannot say that is that ultimately the courts must decide whether the Bill conflicts with the European Communities Act. The hon. Member for Cornwall, North seeks to make the Price Commission publish its exercise of this power, when it has been clearly stated that we are not even certain whether giving it a power of so wide an ambit is an illegality and when it has been clearly said by the Chief Secretary that any use of such a power might be illegal, and certainly would be illegal if it conflicted with——

Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. I am having great


difficulty in finding out how this could be relevant.

Mr. English: I am sorry, Mr. Deputy Speaker, but I am having great difficulty in understanding how, if all the matters leading up to a decision of the Price Commission were not published, the courts could decide whether the action was legal. We were told in Committee by the Chief Secretary that to take a power may be illegal, and this is apparently such a power, because the provision is that any price or any charge can be altered by the Price Commission. That is one such power, and to take such a power may be illegal. We have been told that to use it would be illegal if it contravenes the Treaty of Rome. How will courts be able to decide the issue if the matters leading up to it are not published?

Mr. Deputy Speaker: Order. This is a matter of publication of reports.

Mr. English: Precisely.

Mr. Macmillan: Perhaps I may help the hon. Gentleman. The points that he is raising about the European Communities Act do not arise under Clauses 6 and 7, but they could arise on Clause 8. Clauses 6 and 7 give the agencies power to operate under a code. The code as expressed in the consultative document excludes the products of the European Coal and Steel Community as defined in the Treaty of Paris. It also exempts goods and services where prices are regulated as a result of international agreements or arrangements.
In a previous debate I said that general price restrictions of the kind about which the hon. Gentleman is thinking do not contravene either Article 85 or Article 86 of the EEC competition policy. Therefore, as these clauses operate a code, and as the code either is designed to exempt goods or is not affected by European policy, I think that the point being made by the hon. Gentleman is covered.

Mr. English: I shall not press the point further, but, in my view, to say that the Price Commission can restrict "any prices" is a matter of slovenly drafting. The butter subsidy provided an example of Ministers not having been told something by their Department. They appeared surprised that they could do

something which hitherto they had been forbidden to do. By law they cannot reduce food prices, but they were allowed to reduce the price of butter if they wished to do so. But they did not know, for the simple reason that, although there was a Community decision applying to the original member States, a corresponding decision slightly varying that in relation to the new member States was in draft in Brussels but had not been published and Ministers' civil servants in Brussels had not told them about it. Ministers did not know because it was a decision of the Commission. We have here a specific example of publication and how important it is.
The hon. Member for Cornwall, North asked how one could conduct these discussions in private and simply produce a fiat that a price must be reduced or restricted. We are already aware, with this slovenly piece of drafting, which is here merely because draftsmen have not altered their form of words to cope with the fact that we have another legislature elsewhere as well as this one here, that hon. Gentlemen opposite no longer know of legislative decisions which will affect and change the Bill after it is passed. Although we decide on this matter, it may be altered by other means in the future. Hon. Gentlemen opposite must brush themselves up and publish things that will affect the Bill.
I support the hon. Member for Cornwall, North in suggesting that the two agencies should publish their decisions so that we can see whether they are operating legally under the code and also whether they are operating legally under Community law.

Mr. Harold Walker: My hon. Friend the Member for Nottingham, West (Mr. English) made a valid point. I do not wish to pursue it. I propose instead to draw attention to the fact that there is a difference between paragraph 10(ii) of the code, which exempts
prices of goods and services where the application of the control would be inconsistent with an international agreement or arrangement
and so on, and what my hon. Friend is asking for: that notwithstanding that provision the Price Commission and the Pay Board should have the power to investigate and make reports upon circumstances which necessitate increases.


My hon. Friend gave the good and valid example of the increase in butter prices flowing from European Community policy.
7.30 p.m.
These amendments are obviously a logical continuation of the interesting and useful debate that we have had today. We are talking essentially about the same subject—namely parliamentary, and hence public, accountability and control. We are considering another aspect of the same theme. The amendments tabled by the hon. Member for Cornwall, North (Mr. Pardoe) are a useful and constructive set of amendments towards that end. They go right to the root of the objections, expressed not only from this side but by hon. Members on the Government side, to the extraordinary powers of the two new creatures, the two new Government watchdogs, and the question of who will hold the leads on those watchdogs and whether they will be let loose to create havoc and destruction.
We were told in Standing Committee—although it has been repeated so often, it bears repetition—that these bodies are to have unprecedented powers. They will exercise, in the words of the Chief Secretary, a more pervasive influence in these fields than anything that has preceded them, and they are to have quasi-judicial powers. The alarm which has been repeatedly expressed cannot be over-emphasised, nor can our concern about the transfer of so much power on a dramatic scale, so much control, from Parliament to extra-governmental agencies over which we shall have precious little or no control.
We are giving a licence to govern to people who will not be publicly accountable, and at the same time we are diminishing the powers of this House. In 12 months the Mother of Parliaments, as we are pleased to call ourselves, the fount of democracy in the modern era, will have handed over power—passively, the Government hope—to the EEC and now to these two new agencies. In short, over great areas of our economic, commercial and industrial life these two new bodies will be given a licence to govern.
The House should try to impose on them some public accountability and control, certainly in much greater measure

than has been proposed by the Government so far, notwithstanding the minor concession that the original proposal of an annual general report has now been modified to a quarterly report of a general character. In spite of the way in which the Secretary of State keeps teetering on the brink, there is no commitment that the House will be able to debate or reach any conclusions about the content of those reports.
I was pleased that the hon. Member for Cornwall, North should have referred to the importance of specific reports as opposed to what we are offered—general reports. It is important that we not only consider the generality of the influence of these two bodies on the economy and the pattern of pay and prices but also give them the opportunity to repeat some of the valuable and constructive work of the National Board for Prices and Incomes. One of the most useful things that that board did was to build up a quarry of information about pay structures and methods of determining prices.
I was very disturbed by the intemperate and ill-informed speech of the hon. Member for Enfield, West (Mr. Parkinson). I regret that he is not present and I apologise for not having given him prior notice that I intended to refer to him. He followed up a series of criticisms and attacks that we have heard of late, primarily from the Government side, on productivity deals. It seems to me—[Interruption.] The Secretary of State is muttering from a sedentary position. I do not know whether he is agreeing with his hon. Friend or not. It appears that he is. Those who attack productivity deals are damaging industry and not helping industrial relations or the development of productivity in industry.
This matter was the subject of two references to the old National Board for Prices and Incomes. I cite them as two examples of the kind of report which could usefully be produced by governmental agencies. In its report No. 36, the board set out what were accepted and applied as the guidelines for productivity deals, in so far as the productivity stemmed from a more efficient and effective utilisation of labour. Because of the criticisms and allegations of bogus and sham productivity deals, the board instituted an inquiry which resulted in its report No. 123, which found them


to be without substance and pointed out the useful role that productivity deals had played in increasing industrial efficiency and raising the levels of production and productivity.
There will in future be a range of matters into which the House might reasonably expect the Price Commission in particular to inquire. One thinks, for example, of the monitoring and policing of VAT, which is embodied in the Bill—very ineffectively, as we said in Committee. One would hope that the Price Commission would be given a remit and an opportunity to produce a report for Parliament on the way in which VAT will have been applied by retailers and distributors.
Not all of us share the Chief Secretary's naïve and touching belief that traders will behave fairly, particularly, as we reminded him in Committee, in the light of the way, as he himself acknowledged, they had abused decimalisation.

The Chief Secretary of the Treasury (Mr. Patrick Jenkin): I did not say that. What I said was that decimalisation was changing to a different type of currency and that, as a result, shoppers lost their bearings and found themselves prepared to pay prices which, in the old money, they would have resisted. That is what I said; I did not say that anyone cheated.

Mr. Walker: I hope I am not doing the Chief Secretary an injustice. I share his recollection of his words, but the conclusion one draws from them is that, because the shopper was bemused and confused, she was exposed to exploitation and was exploited. It was not the housewife who put up the price but the retailer or the distributor who took advantage of her.
What I am saying—I am sure that my view is shared by many people not only here but outside—is that the shopper will be similarly confused by VAT and similarly unable to make the calculations. I cannot make the calculations, so I do not know how my wife will be able to. She will be exploited in the same way. It is interesting to see the Chief Secretary smiling cynically. I only wish that those who will be suffering that exploitation could have seen the expression on his face just then.
One final example is brought to my attention from our debate late on Monday evening, when we debated the Bacon Curing Industry Stabilisation Scheme. The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, repudiated suggestions about possible increases in bacon prices, and said:
I must say … that I am a little concerned at the rather loose talk of prices going up 2p and 3p a lb. I should be interested to know where that comes from. My hon. Friend pointed out that the overall effect on bacon prices would be rather less than ½p a lb."—[OFFICIAL REPORT, 27th February 1973; Vol. 851, c. 1225.]
The Times today carries the words of the spokesman of the industry, Sir John Stratton, Chairman of the British Federation of Bacon Curers. It says that he
yesterday predicted a wholesale price increase of at least 5p a lb. on British bacon"—
not a retail increase of 2p or 3p—
if the Phase Two proposals were implemented.
Within two days, therefore, we have had an extraordinary contrast between what a Government spokesman apparently genuinely believes to be the case in an important area of food distribution and retailing and what the trade is saying. One would have thought that this was the kind of thing into which the Price Commission should be given a remit to inquire and to produce a report and make recommendations. The spokesman of the British Federation of Bacon Curers went on to castigate the Government for an apparent denial of their stated bacon policy in phase 1.
I find it extraordinarily difficult to follow why bacon is not classed as a processed food in phase 1 but is treated as such so that its price can be controlled. What is the difference?

Mr. English: We are all fascinated by my hon. Friend's argument. Will he accept that what is even worse is that because it is a food price and comes under Community law, the Government have no power to reduce the increase? They might reduce the increase in the price of butter, but they can reduce the increase in prices of other foods only with the commission's permission, and the commission has not given its permission for a reduction in the price of bacon.

Mr. Walker: My hon. Friend has expertise in these matters. He has studied the EEC, the treaty, the legislation flowing from it and the work of the Commission. I am prepared to accept his word.
The dilemma confronting the Government in this area is that on the one hand they are confronted with price increases which arise from purely indigenous factors, and on the other hand they can have grafted on to those the decisions and developments within the Community. I am not sure to what extent the increases are within the Government's control, if at all, in the case of a processed food which is, presumably, subject to control. Here we have the difficulty of whether bacon is a processed food. I am not sure whether it is a fresh food or a processed food, and apparently neither the Government nor the industry are clear about it.
Finally, I draw another point from the same article in The Times today. There is reference to the fact that
Some retailers want the Government to adopt a far more active rôle in explaining food price increases to the public.
One would have thought that when the Price Commission is eventually established it will, for example, when we have another fiasco about beef and meat prices, tell us who is making the lolly. That is the kind of thing we shall expect the Price Commission to be able to tell us. Clearly many people have made a lot of money out of these increases and their income has not been restricted in phase 1. In the absence of a report from the Price Commission—as that body has not yet been created—perhaps the Government will tell us that if there is any repetition of that kind of ramp the commission will say exactly who has been making what out of whom, that information not being buried in the details of a general report but clearly stated in a specific report.
I stress the importance and value of having reports about specific matters sufficiently early to have topicality and relevance rather than having these things lost in the blur and confused detail of a general report. I hope that the Secretary of State will see the good sense and democratic appeal of our arguments. I hope he will show a sympathetic response to our arguments and give us a reply on the specific point I have raised.

7.45 p.m.

Mr. Maurice Macmillan: For once there is not very much dividing the House on this issue, except perhaps the frequency of the report which the hon. Member for Cornwall, North (Mr. Pardoe) would like to see, and the statutory obligation to have a national television programme once a week or so.

Mr. Pardoe: Every three months.

Mr. Macmillan: I deal first with one or two particular points raised during the debate.
The Price Commission will be able to keep under review the prices of fresh foods and to issue regular information and advice about them. That applies whether or not the products are subject to the Community's common agricultural policy. That was what the hon. Member for Doncaster (Mr. Harold Walker) was asking—that the agency should be able to report on what it was not able to do as well as what it was able to do. That is possible. It will be able to do that and report on it.
Similarly, the Price Commission will be able to keep under review the effect of other prices that it cannot control, such as prices of raw materials, and that can form part of the report.
The hon. Member for Cornwall, North mentioned appeals. He referred to the question of an appeal against a decision of the agency to the courts as if that were in all circumstances impossible. I think that he was referring to this matter in relation to the need for publicity, but it would be wrong to give a mistaken impression. It is always possible to have recourse to the courts on the ground that an agency has acted ultra vires. That would normally happen only after the agency had made an order or given a notice, because only then could there be any question of a challenge against the agency's action.
There may be other ways in which the agency could be challenged, such as by an action for a declaration, and there could be an appeal if anyone were convicted of contravening an order of the agency. Again, on the question of an appeal against a conviction under an order, the question of vires could arise.
I want to make it plain that the agencies are not, as has been unintentionally implied, apart from action in


the courts. I entirely agree with the hon. Member for Cornwall, North and the hon. Member for Doncaster that one of the main objectives the agencies must have is to get the maximum amount of publicity and information to the public, for the general reason of making the policy work, and to the House for the reasons given by the hon. Member for Doncaster, so that we here can fulfil our proper rôle of being accountable to our constituents and for what happens to them.
If the House would direct its attention to Amendment No. 17 to Schedule 1, it will be seen that this requires the agency to make reports to the Secretary of State. That applies to whichever Secretary of State is responsible to whichever agency. The Daily Telegraph has implied that I would be responsible for insurance, but I think that that was due to a technical error in not understanding that Secretaries of State are interchangeable. In this case the Minister for Trade and Consumer Affairs will be responsible for the Price Commission, and the Secretary of State for Employment will be responsible for the Pay Board. The phrase "Secretary of State" in any piece of legislation can apply to the relevant Secretary of State, regardless of which one he happens to be. Sometimes it can be confusing.
Each report has to be submitted to the Secretary of State within 30 days of the end of the period which it covers. It is a quarterly report. The third paragraph of the amendment to Schedule 1 states
The first two months during which Part II of this Act is in force shall be covered by a separate report.
The object of that is simply so that the first report does not come after the House would normally have risen for the Summer Recess. That paragraph of the amendment also covers the question of a terminal report if the agencies should cease to operate their statutory powers.
The last paragraph of the amendment deals with the Minister responsible for seeing that the agencies make a report, and in relation to the Price Commission it includes the Minister of Agriculture, Fisheries and Food with the Secretary of State. That is just to make sure that there is no mistake there. This requirement for the agency to make a monthly

report would be too big a burden, particularly if it were to be as detailed as the hon. Member for Cornwall, North wants. Although it is right to leave the form in which the agencies should report as a matter for them in the first instance, I have powers of direction, as does the Secretary of State for Trade and Industry, and we can ensure that the report meets the needs of the House. But it is difficult to dictate the precise form of the report that an agency of this sort will make in advance of its coming into action.
Later amendments ensure that for every order the agency makes, warning notices, notices of restriction and consent, and all such matters of considerable detail, have to be published. That will make an impact, bearing in mind that contravention of the code is not itself an offence, of the functions of the agencies clearly on the public. It is important to notice, and we referred to this in Committee not completely——

Mr. English: I am grateful to the right hon. Gentleman for the soft tone of his answer. He mentioned that my hon. Friend the Member for Doncaster (Mr. Harold Walker) wanted the Price Commission to report on what it could not do as well as what it could do and had done. Will he undertake that he will ask it, at least in the most general terms, to do that, because, as I think we have illustrated, it is a very important matter now?

Mr. Macmillan: I think we could get on more quickly if I went on with my arguments, I was about to come to that point. I was referring to the point about general publicity. In Schedule 1(16) to which Amendment No. 17 refers, the agency has the power to arrange for publication, and the instruction is deliberately drawn in wide terms—
in such form and in such manner as they may consider appropriate, of such information …
and so on so as to enable the agencies to get on with the sort of publicity which hon. Members opposite and the Government want, and which the agencies want for their own purposes.
Paragraph 17 enables the Secretary of State to give directions in this respect, and he can, therefore, give directions about any general matters of publicity.
The other general point raised by the hon. Member for Doncaster concerned the agency making specific reports in depth on specific problems. That it is empowered to do in Schedule 1(1) and (2). I have the power to direct it so to do. That comes under its advisory capacity, and it is not dependent on the statutory obligations, as are the other powers which have been discussed.
I hope that the hon. Member for Cornwall, North and other hon. Members will feel that all these provisions must be taken together. The question of the publication of notices, of orders and of consents, the capacity of the agency to act in an advisory role by making specific reports on specific problems, the obligation of the agency to make a quarterly report—which I hope will be in detail—covering its activities, and its power to go in for publicity beyond its statutory obligation—which is extremely important—cannot be taken in isolation. I should not like it to be thought that the agencies were confined to the sort of report which is made mandatory on them in the Bill, but I would hope that they would be able to enlist public support for their actions in the way suggested by the hon. Members.

Mr. David Clark: We accept with approval the Secretary of State's emphasis on publicity and the support of the public. But I wonder meanwhile whether or not the Government will undertake that responsibility. For example, let us take the point raised by my hon. Friend the Member for Doncaster (Mr. Harold Walker) on bacon prices. On the one hand the Government are saying that bacon prices will rise by ½p a lb. and on the other hand wholesalers are saying they will rise by 5p a lb. Will the right hon. Gentleman give us an assurance that he will do everything he can to clear this up and to clear up other points in order to allay the fears of the general public?

Mr. Macmillan: That is outside the terms of the amendment, which relates to the agency and not to the Minister. But I can assure the hon. Member that it is in the interests neither of the public nor of the Government that there should be room for doubt about these matters at this phase of the standstill.
I hope that the House will feel that the provisions not only in Amendment No. 17, which we are discussing, but linked with those which we are to discuss later go as far as is reasonable to expect the Government to go in meeting the point raised by the hon. Member.

Amendment negatived.

Clause 9

RESTRICTIONS ON DIVIDENDS

Mr. David Steel: I beg to move Amendment No. 39, in page 6, line 34 after 'dividends', insert:
'other than dividends paid to employees of those companies under a profit sharing scheme'.
I need not detain the House long in moving what is a straightforward and simple amendment. The clause gives the Treasury power to restrict the declaration or payment of ordinary dividends by a company. The simple point that I and my colleagues wish to make is that while accepting the general principle we should wish to exempt from that power the payment of dividends to employee shareholders.
It will not surprise the Treasury Bench that we take this opportunity yet again of raising the whole question of the lack of Government encouragement for profit-sharing. In this case we are not actually asking the Government to do something as we have frequently done before; we are merely asking them to refrain from doing something. It would be easy and simple for them to exempt profit-sharing schemes from the effect of the clause.
In our view profit-sharing is certainly no substitute for good wages or for works councils and genuine participation. But we believe that it is an incentive in an area of industrial relations and in the spreading of wealth where the Government could use their influence for the general good. It is some time since we had any figures but according to a Ministry survey in 1954 there were at that time only about 500 companies operating profit-sharing schemes. I should be interested to know whether the Government have had information since that date. I suspect that the number has not risen a great deal.
The fact is that of the major industrial nations we are perhaps the least generous


and the least conscious of the advantages of profit-sharing schemes in industry. In America about 20 per cent. of the public companies quoted on the New York Stock Exchange operate general schemes. I do not say that they are specific schemes, but they are generally schemes which could be described as encouraging employee savings and investment. In West Germany there is an entirely different attitude, a more constructive attitude of co-operation and partnership in industrial relations. The law allows tax freedom on sums up to 312 deutschemarks per worker per annum in approved schemes. There is, therefore, a precedent in other industrialised nations among our competitors for direct Government financial incentive for profit-sharing schemes. All we are asking is that the Government should take this opportunity to give a minor encouragement to such schemes by exempting them from the dividend control set out in the Bill.
8.0 p.m.
If anyone had any doubts about the need for a constructive attitude towards profit-sharing schemes and the encouragement of industrial partnership, he probably had them removed if he noted yesterday's speech by the hon. Member for Tottenham (Mr. Atkinson), who said:
the argument is between the control of wages on the one hand and the control of prices on the other. It depends to which side of the House hon. Members belong whether they support capital or labour … In my view it is a question of which side of the argument one supports whether one argues for price regulation or regulation of wages."—[OFFICIAL REPORT, 27th February 1973; Vol. 851, c. 1365–66.]
There is no doubt that in the public mind the Government are identified with the policy of a fairly severe clampdown on increases in wages and the Opposition are identified with wanting a severe clampdown on prices. What I believe most people will accept as fair is a balanced view of the need to restrain both prices and incomes. That is what the Government say they are taking power to do in the present legislation. Their protestations of good will would be much more widely believed if they accepted a simple and straightforward amendment of the kind that I now move.

Mr. Peter Rees: Ever since I have applied my mind to the kind of

problem that we now face I have been much in favour of worker participation, whether by a loose partnership, as in the John Lewis Partnership, by share option schemes, or by the straight issue of shares to workers. I am not certain that in the present state of our industrial democracy all workers fully appreciate what they are being offered. Many ICI shares find their way on to the market quite soon after Fridays.
But I am entirely in sympathy with the principle, for two reasons. First, I want to see work people associate themselves as closely as possible with the prosperity of the companies for which they work. Secondly—I hope that this does not sound too patronising—I want to see them exposed to the economic risks that the business community faces, to see them made more aware of the facts of economic life.
People too often claim a kind of equity participation, in that they want their wages to move up in line with the company's prosperity, but they also want a preferential position, because, whatever the company's fortunes may be, they expect their wages to be paid. I should prefer a closer correlation between the employee's fortunes and those of his company. I realise that if a company goes into liquidation the workers suffer as much as anyone, or more, but the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) will see the trend of my thinking.
I am against the amendment, because it will work exactly against the principle I have stated, at least in one respect. I appreciate that the amount of the dividend must still depend on the availability of profits, but the hon. Gentleman is asking my hon. Friend the Chief Secretary to say that the workers in question must be put in a special category above that of any other shareholder and immunised from the prevailing economic situation. In other words, although the ordinary shareholders will have their dividends limited in the precise and rather onerous way that the pay code lays down, the workers, although they will have their wages limited must, so far as they have a direct shareholding or partnership interest in their employer, be exempt. That must be a bad principle. I do not say that it will encourage irresponsibility, but it will take the workers away from the climate to which everyone else is exposed.
Although I am entirely in favour of worker participation, in whatever form it is devised, the amendment does not advance the principles to which I adhere.

Sir Henry d'Avigdor-Goldsmid: I speak as one who has the responsibility for administering schemes of the kind with which the amendment deals. By their essence, the shares allotted to executives, in what are usually called incentive schemes, or to workers are limited to a proportion of the capital—about 5 per cent. in present conditions. Therefore, under the amendment practically every company would be in a position to make a vastly increased payment on its workers' shares as a form of remuneration to the workers, wholly divorcing it from the dividend which is the revenue going to the shareholders.
It is not an artificial difficulty that I am stating. As the chairman of a company I should find myself up against it if the amendment were made. My employees are not now entitled to the sort of increase that I should like them to have and that most well-conducted businesses would like to give. What could be easier than to given them an extra 10 per cent. on their shares? That would be entirely contrary to the spirit of the Bill, and would cause great problems.
I hope that the hon. Member for Rox-burgh, Selkirk and Peebles (Mr. David Steel), for whose abilities I have great regard, will not press the amendment.

Mr. Patrick Jenkin: I hope that the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) will not regard it as a discourtesy if I do not reply at great length. Like my hon. Friends and the hon. Gentleman, I support the broad objectives of the kind of schemes the hon. Gentleman talked about. They have a part to play in creating a closer identity of interest between management and employees. Like the hon. Gentleman, I often feel disappointed that more companies do not think it worth while to try to help relations with employees by the introduction of such schemes.
I say that with a certain amount of chagrin, because I once worked for a company which had a profit-sharing arrangement. It did not involve a distribution of shares. A proportion of the profits

was distributed to the employees. By the general wish of the employees, that payment was eventually converted into a straight addition to wages and salaries, and the scheme was brought to an end.
Such schemes have difficulties. They are not always understood. When there is a variation in the amount of profit and people have come to rely on receiving a certain amount, ill will can be created. But the schemes have a part to play, and I hope that they will be encouraged.
That is not to say that the amendment would necessarily be the right way in which to encourage profit-sharing schemes. I am sure that the hon. Gentleman realises that in hanging his argument on the amendment he is confining himself to that type of profit-sharing scheme which involves the distribution of shares to employees, a particular kind of scheme which is by no means the only kind that can exist.
The hon. Gentleman is asking that any such shares happening for the time being to be in the ownership of an employee to whom they have been distributed should be exempt from the dividend control. If the shares so issued were of the same class as shares available in the market or available to ordinary shareholders in the company, it would be of exceedingly doubtful propriety that the dividend should be restricted for one category of shareholder while not being similarly restricted for the category covered by the amendment.
Therefore, apart from the argument of principle that my hon. and learned Friend the Member for Dover (Mr. Peter Rees) and my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) advanced against the amendment, I doubt whether it would succeed in achieving its objective. It could work only if a special class of shares had been issued, so that they could be subject to a different identifiable regime from that applicable to the shares in the company as a whole.
Another and more general objection is that a pattern of dividend restraint such as we seek in phase 2, slightly less strict than has been applied during the standstill, is not an appropriate environment in which to seek to offer incentives to profit-sharing schemes.
The amendment would involve discrimination in favour of a particular type of


scheme, but the policy is intended to be of pretty well universal application. The only exceptions—and I explored this matter with the hon. Member for Dudley (Dr. Gilbert) in Committee—are investment trust companies and close companies, which have to distribute because of the tax laws. To create an additional category of share because it happens to be in the form of a shareholding with employee benefits would be inappropriate. It is not that the policy discriminates against the profit-sharing schemes but that the amendment seeks to discriminate actively in their favour. In the general context of pay and price restraint which we are introducing, with comparable dividend restraint, that would hardly be regarded as consistent with the policy.
While I appreciate the hon. Gentleman's motives in moving the amendment and endorse a great deal of what he said about the value of these schemes for promoting and encouraging better employee-employer relations, I must advise the House that the method of implementation which he is seeking to urge on the Government is not one that I can endorse.

Mr. Pardoe: The Chief Secretary has said that the principle enshrined in the amendment is one which he hopes will be encouraged further. Of course, it will not be encouraged unless a Government encourage it. Liberals have been moving amendments to all sorts of Bills on profit-sharing over the years and Governments have never encouraged the principle.
There are a whole host of reasons for wanting profit sharing, but I do not suggest that profit sharing is the most important part of forming a new industrial partnership between capital and labour. There may be all sorts of reasons for wanting a profit-sharing scheme, but it is not with that that I am concerned. I do not want to go into the distribution of wealth, which is mentioned at some length in the Labour Party's paper which was issued today.
In answer to the hon. Gentleman, and in answer to the points raised by his hon. Friends about the incomes policy element, the Green Paper twice makes reference to profit-sharing schemes. Paragraph 103 states that
The following count against the pay limit and against the individual limit of £250".

part(ii)says:
any element in personal increments which relates to factors not personal to the individual concerned, such as the cost of living increases or company profits (other than under a profit sharing scheme as it existed before 6th November 1972).
Paragraph 111 says:
Payments under the terms of profit-sharing schemes as they stood before 6th November 1972 will not count against the pay limit. Any other payments or benefits under such schemes must be counted against the pay limit.
In other words, profit-sharing schemes entered into after 6th November will not be allowed to be set off against the pay limit.
The Financial Secretary and his hon. Friends have indicated that the amendment drives a hole or a coach and horses through the prices and incomes policy. As the hon. Gentleman knows, I am a supporter of the prices and incomes policy and I do not want to drive a hole through it. However, there is no reason why we should not use the policy to encourage profit sharing. I accept that there may be opportunities, as the hon. Gentleman has said, to create a gap or a leak in the policy. However, I happen to believe that there are benefits in future for our economy as a whole, and not just for individual workers, which are worth that price.
8.15 p.m.
I accept immediately that profits are not the ideal measure of efficiency and performance, but they are no worse than any other measure. They are no worse than most productivity agreements and no worse than piece work. I draw the hon. Gentleman's attention to a most interesting pamphlet by Professor Hayek, "The Outlook for the 1970s—Open or Repressed Inflation?", which was published not so long ago. In the pamphlet Professor Hayek says:
… that determination of wages by collective bargaining which is the ultimate cause of the inflationary trend".
He goes on to deal with the problem by advocating profit-sharing schemes as an integral part of any sensible, rational and effective prices and incomes policy. He said that to persuade the unions to accept an alternative method of wage determination, while offering the workers as a result a better chance of material advance and, at the same time, restoring


the flexibility of the relative wages of a particular group.
Professor Hayek says that the only solution which he can see to the problem is to offer remuneration not in the form of a fixed wage but as a participation in the profits of the enterprise by which the people are employed. He saw it as an essential part of a prices and incomes policy. He was by no means the only person to do so. I do not wish to go through a long list, but I quote the words of Mr. Aubery Jones in the January issue of the Lloyds Bank Review. He went through various ways of getting a relationship between incomes and output. He said:
It would be injudicious of a Government not to recognise that workers, in struggling for earnings, see themselves as struggling for them at the expense of profits. … A possible reconciliation might be found in a scheme whereby companies lodged part of their retained earnings, in the name of their employees, in a capital fund managed, with the help of investment exerts, by the TUC.
That is one form of profit sharing which would be a part of a prices and incomes policy. That is why I do not see it as either/or—either allowing profit sharing to go through or a prices and incomes policy. I believe that we can have both. An exchange took place in Committee when the hon. Member for Salford, West (Mr. Orme) referred to the sophisticated claim put forward by the Ford workers. I interrupted and said that I thought the case they were making was that Ford had had a splendid year and made a lot of profits and that the workers should have some of them. He referred to the idea which I put forward as nineteenth century laissez-faire. I do not believe that profit sharing is something for the nineteenth century. I believe that it is something for the latter half of the twentieth century. We should use every effort we can to encourage profit sharing not just as a means of distribution of wealth, which I favour, which I hope the Government favour and which I am sure the Opposition favour, but as an essential part of an effective prices and incomes policy.
Having said that, and realising the views of the Treasury, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12

POWER TO OBTAIN INFORMATION

Mr. Maurice Macmillan: I beg to move Amendment No. 10, in page 9, line 31, at end insert:
'(6) This section shall have effect only during any period in which Part II of this Act is in force; but the power conferred by subsection (1) above shall continue to be exercisable, at any time when Part II has ceased to be in force, for the purpose of acquiring information or documents in relation to the bringing of proceedings for an offence under Part II or the doing of anything preparatory, or with a view, to the bringing of such proceedings'.
I need not detain the House long in explaining the purpose of the amendment. It is an extra subsection to Clause 12. It limits the operation of Clause 12 to the period in which the statutory powers of Part II are in force. The clause deals with the powers of Ministers and the agencies to obtain information and to do so, if necessary, by compulsion. The amendment limits the use of these powers to the period when Part II of the Bill is in force. There is a carryover provision to ensure that the agencies can continue after the end of the statutory policy to receive information about anything which is done during that period. That is to ensure, for example, that in the last stages of the statutory period there is no deliberate evasion in the knowledge that information need not be given about activities during the statutory period once the statutory period has expired.
I understand that this is a common provision in regulations of this nature. We have debated the clause very fully in Committee. All I need say in moving the amendment is that its simple purpose is to limit the operation of Clause 12 to the period during which the statutory powers of Part II are in force.

Mr. Benn: I am grateful to the right hon. Gentleman for the amendment. I have a feeling that I had something to do with it because I made a speech in Committee about information and its value. I had a feeling then that some of the Secretary of State's hon. Friends were somewhat frightened to reflect on what it meant.
Information is the key to all effective planning by the Government, and this


was recognised in any case by the introduction of Clause 12. It leads to a change in the relationship between the Government and industry, because if the Government know what industry is doing they are better able to influence industry's decisions, and since the object of the policy is to allow the Government to influence industrial decisions the Government cannot operate without such information.
The Government themselves, as a political party, are very sensitive about information. When I read the amendment the other day, I came across a moving pamphlet called "Free Enterprise or Socialism". It was issued at the last General Election by the Conservative Central Office. In it was one of the great dire warnings by the Conservative Party. It said that if Labour were re-elected there would be ever-increasing direction of the economy by the Government with all the demands for detailed information thereby entailed. That is true. Even the present Government cannot run their policy without a great deal of information.
The solution adopted by the right hon. Gentleman is simple. It is to say that

when the statutory period of the policy comes to an end the policy is to be followed thereafter without any information required by law. This is nonsense, and the right hon. Gentleman knows it. If he wants to run a voluntary policy—and I must give him credit for trying to want to run one—he can do so only if he has information available to him to let him know whether it is succeeding or failing and whether statutory back-up powers might be needed.

However, since the right hon. Gentleman himself moved Amendment No. 3 earlier, providing that statutory powers can run for three years, it is clear that they will run for three years and that over that three-year period there will be a statutory requirement for information to be made available. Even so, this is an important enough point for us to insist on the original wording of the Bill, and I invite my right hon. and hon. Friends to vote against the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 269, Noes 206.s

Division No. 72.]
AYES
[8.23 p.m.


Adley, Robert
Carr, Rt. Hn. Robert
Fry, Peter


Alison, Michael (Barkslon Ash)
Channon, Paul
Galbralth, Hn. T. G. D.


Allason, James (Hemel Hempstead)
Chapman, Sydney
Gibson-Watt, David


Archer, Jeffrey (Louth)
Chataway, Rt. Hn. Christopher
Gilmour, Ian (Norfolk, C.)


Astor, John
Chichester-Clark, R.
Gilmour, Sir John (Fife, E.)


Atkins, Humphrey
Clark, William (Surrey, E.)
Glyn, Dr. Alan


Awdry, Daniel
Clarke, Kenneth (Rushcliffe)
Godber, Rt. Hn J. E.


Baker, Kenneth (St. Marylebone)
Clegg, Walter
Goodhart, Philip


Baker, W. H. K. (Banff)
Cockeram, Eric
Goodhew, Victor


Batsford, Brian
Cooke, Robert
Gorst, John


Beamish, Col. Sir Tufton
Coombs, Derek
Gower, Raymond


Bell, Ronald
Cooper, A. E.
Grant, Anthony (Harrow, C.)


Bennett, Sir Frederic (Torquay)
Corfield, Rt. Hn. Sir Frederick
Gray, Hamish


Bennett, Dr. Reginald (Gosport)
Costain, A. P.
Green, Alan


Benyon, W.
Critchley, Julian
Grieve, Percy


Berry, Hn. Anthony
Crowder, F. P.
Griffiths, Eldon (Bury St. Edmunds)


Biffen, John
d'Avigdor-Goldsmid, Sir Henry
Grylls, Michael


Biggs-Davison, John
d'Avigdor-Goldsmid,Maj.-Gen.Jack
Gummer, J. Selwyn


Blaker, Peter
Dean, Paul
Hall, Miss Joan (Keighley)


Boardman, Tom (Leicester, S.W.)
Deedes, Rt. Hn. W. F.
Hall, John (Wycombe)


Body, Richard
Dixon, Piers
Hall-Davis, A. G. F.


Boscawen, Hn. Robert
Dodds-Parker, Douglas
Hamilton, Michael (Salisbury)


Bossom, Sir Clive
Drayson, G. B.
Hannam, John (Exeter)


Bowden, Andrew
Dykes, Hugh
Harrison, Brian (Maldon)


Braine, Sir Bernard
Edwards, Nicholas (Pembroke)
Harrison, Col. Sir Harwood (Eye)


Bray, Ronald
Elliot, Capt. Walter (Carshalton)
Haselhurst, Alan


Brewis, John
Elliott, R. W. (N'c'tle-upon-Tyne,N.)
Hastings, Stephen


Brinton, Sir Tatton
Emery, Peter
Havers, Michael


Brocklebank-Fowler, Christopher
Eyre, Reginald
Hawkins, Paul


Brown, Sir Edward (Bath)
Farr, John
Hayhoe, Barney


Bruce-Gardyne, J.
Fenner, Mrs. Peggy
Heath, Rt. Hn. Edward


Bryan, Sir Paul
Finsberg, Geoffrey (Hampstead)
Heseltine, Michael


Buchanan-Smith, Alick (Angus,N&amp;M)
Fletcher-Cooke, Charles
Hicks, Robert


Buck, Antony
Fookes, Miss Janet
Higgins, Terence L.


Bullus, Sir Eric
Fortescue, Tim
Hiley, Joseph


Burden, F. A.
Foster, Sir John
Hill, John E. B. (Norfolk, S.)


Butler, Adam (Bosworth)
Fowler, Norman
Hill, James (Southampton, Test)


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Fox, Marcus
Holland, Philip


Carlisle, Mark
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Holt, Miss Mary




Hordern, Peter
Mitchell. Lt.-Col. C.(Aberdeenshire, W)
Skeet, T. H. H.


Hornby, Richard
Mitchell, David (Basingstoke)
Soref, Harold


Hornsby-Smith,Rt.Hn.Dame Patricia
Moate, Roger
Speed, Keith


Howe, Hn. Sir Geoffrey (Reigate)
Molyneaux, James
Spence, John


Howell, David (Guildford)
Money, Ernie
Sproat, Iain


Hunt, John
Monks, Mrs. Connie
Stainton, Keith


Hutchison, Michael Clark
Montgomery, Fergus
Stanbrook, Ivor


Iremonger, T. L.
More, Jasper
Stewart-Smith, Geoffrey (Belper)


Irvine, Bryant Godman (Rye)
Morgan-Giles, Rear-Adm.
Stodart, Anthony (Edinburgh, W.)


James, David
Morrison, Charles
Stoddart-Scott, Col. Sir M.


Jenkin, Patrick (Woodford)
Mudd, David
Stokes, John


Jennings, J. C. (Burton)
Nabarro, Sir Gerald
Stuttaford, Dr. Tom


Jessel, Toby
Neave, Airey
Sutcliffe, John


Johnson Smith, G. (E. Grinstead)
Nicholls, Sir Harmar
Tapsell, Peter


Jones, Arthur (Northants, S.)
Noble, Rt. Hn. Michael
Taylor,Edward M.(G'gow,Cathcart)


Jopling, Michael
Normanton, Tom
Taylor, Robert (Croydon, N.W.)


Keberry, Sir Donald
Nott, John
Tebbit, Norman


Keilett-Bowman, Mrs. Elaine
Onslow, Cranley
Temple, John M.


Kilfedder, James
Oppenheim, Mrs. Sally
Thatcher, Rt. Hn. Mrs. Margaret


Kimball, Marcus
Orr, Capt. L. P. S.
Thomas, Rt. Hn. Peter (Hendon, S.)


King, Tom (Bridgwater)
Osborn, John
Thompson, Sir Richard (Croydon, S.)


Kinsey, J. R.
Owen, Idris (Stockport, N.)



Kitson, Timothy
Page, Rt. Hn. Graham (Crosby)
Tilney, John


Knight, Mrs. Jill
Parkinson, Cecil
Trafford, Dr. Anthony


Knox, David
Peel, John
Trew, Peter


Lambton, Lord
Percival, Ian
Tugendhat, Christopher


Lamont, Norman
Peyton, Rt. Hn. John
Turton, Rt. Hn. Sir Robin


Langford-Holt, Sir John
Pink, R. Bonner
Vaughan, Dr. Gerard


Le Marchant, Spencer
Price, David (Eastleigh)
Vickers, Dame Joan


Lewis, Kenneth (Rutland)
Prior, Rt. Hn. J. M. L.
Waddington, David


Lloyd, Ian (P'tsm'th, Langstone)
Proudfoot, Wilfred
Walder, David (Clitheroe)


Longden, Sir Gilbert
Pym, Rt. Hn. Francis
Walker, Rt. Hn. Peter (Worcester)


Loveridge, John
Raison, Timothy
Walker-Smith, Rt. Hn. Sir Derek


Luce, R. N.
Ramsden, Rt. Hn. James
Wall, Patrick


McAdden, Sir Stephen
Rawlinson, Rt. Hn. Sir Peter
Ward, Dame Irene


MacArthur, Ian
Redmond, Robert
Warren, Kenneth


McCrindle, R. A.
Reed, Laurance (Bolton, E.)
Weatherill, Bernard


McLaren, Martin
Rees, Peter (Dover)
Wells, John (Maidstone)


Maclean, Sir Fitzroy
Rees-Davies, W. R.
White, Roger (Gravesend)


McMaster, Stanley
Renton, Rt. Hn. Sir David
Wiggin, Jerry


Macmiltan,Rt.Hn.Maurice (Farnham)
Rhys Williams, Sir Brandon
Winterton, Nicholas


McNair-Wilson, Michael
Ridsdale, Julian
Wolrige-Gordon, Patrick


McNair-Wilson, Patrick (New Forest)
Roberts, Michael (Cardiff, N.)
Wood, Rt. Hn. Richard


Maddan, Martin
Roberts, Wyn (Conway)
Woodnutt, Mark


Madel, David
Rodgers, Sir John (Sevenoaks)
Worsley, Marcus


Maginnis, John E.
Rost, Peter
Wylie, Rt. Hn. N. R.


Marten, Neil
Russell, Sir Ronald
Younger, Hn. George


Mather, Carol
Scott, Nicholas



Maude, Angus
Shaw, Michael (Sc'b'gh &amp; Whitby)
TELLERS FOR THE AYES:


Maudling, Rt. Hn. Reginald
Shelton, William (Clapham)
Mr. Hugh Rossi and


Mawby, Ray
Shersby, Michael
Mr. Oscar Murton.


Maxwell-Hyslop, R. J.
Simeons, Charles



Miscampbell, Norman
Sinclair, Sir George





NOES


Abse, Leo
Clark, David (Colne Valley)
Edwards, Robert (Bilston)


Allaun, Frank (Salford, E.)
Cocks, Michael (Bristol, S.)
Edwards, William (Merioneth)


Archer, Peter (Rowley Regis)
Cohen, Stanley
Ellis, Tom


Ashley, Jack
Coleman, Donald
English, Michael


Atkinson, Norman
Concannon, J. D.
Evans, Fred


Barnes, Michael
Corbet, Mrs. Freda
Fisher, Mrs. Dorls(B'ham, Ladywood)


Barnett, Guy (Greenwich)
Cox, Thomas (Wandsworlh, C.)
Fitch, Alan (Wigan)


Barnett, Joel (Heywood and Royton)
Crawshaw, Richard
Fletcher, Raymond (Ilkeston)


Beaney, Alan
Cronin, John
Fletcher, Ted (Darlington)


Benn, Rt. Hn. Anthony Wedgwood
Crosland, Rt. Hn. Anthony
Foot, Michael


Bidwell, Sydney
Crossman, Rt. Hn. Richard
Ford, Ben


Blenkinsop, Arthur
Cunningham, G. (Islington, S.W.)
Forrester, John


Boardman, H. (Leigh)
Dalyell, Tam
Fraser, John (Norwood)


Booth, Albert
Davies, Denzil (Llanelly)
Freeson, Reginald


Bottomley, Rt. Hn. Arthur
Davies, Ifor (Gower)
Galpern, Sir Myer


Boyden, James (Bishop Auckland)
Davis, Clinton (Hackney, C.)
Gilbert, Dr. John


Bradley, Tom
Davis, Terry (Bromsgrove)
Ginsburg, David (Dewsbury)


Broughton, Sir Alfred
Deakins, Eric
Grant, John D. (Islington, E.)


Brown, Hugh D. (G'gow, Provan)
Delargy, Hugh
Griffiths, Eddie (Brightside)


Brown, Ronald (Shoreditch &amp; F'bury)
Dell, Rt. Hn. Edmund
Griffiths, Will (Exchange)


Buchan, Norman
Dempsey, James
Hamilton, William (Fife, W.)


Butler, Mrs. Joyce (Wood Green)
Douglas, Dick (Stirlingshire, E.)
Hardy, Peter


Callaghan, Rt. Hn. James
Douglas-Mann, Bruce
Harrison, Walter (Wakefield)


Cant, R. B.
Driberg, Tom
Hattersley, Roy


Carmichael, Neil
Duffy, A. E. P.
Healey, Rt. Hn. Denis


Carter, Ray (Birmingh'm, Northfield)
Dunn, James A.
Heffer, Eric S.


Carter-Jones, Lewis (Eccles)
Eadie, Alex
Hooson, Emlyn


Castle, Rt. Hn. Barbara
Edelman, Maurice
Houghton, Rt. Hn. Douglas







Howell, Denis (Small Heath)
Mendelson, John
Short, Mrs. Renée (W'hampton,N.E.)


Huckfield, Leslie
Mikardo, Ian
Silkin, Rt. Hn. John (Deptford)


Hughes, Rt. Hn. Cledwyn (Anglesey)
Millan, Bruce
Silkin, Hn. S. C. (Dulwich)


Hughes, Roy (Newport)
Miller, Dr. M. S.
Sillars, James


Hunter, Adam
Milne, Edward
Silverman, Julius


Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Mitchell, R. C. (S'hampton, Itchen)
Skinner, Dennis


Janner, Greville
Molloy, William
Small, William


Jay, Rt. Hn. Douglas
Morgan, Elystan (Cardiganshire)
Smith, John (Lanarkshire, N.)


Jeger, Mrs. Lena
Morris, Alfred (Wythenshawe)
Spearing, Nigel


Jenkins, Hugh (Putney)
Morris, Charles R. (Openshaw)
Spriggs, Leslie


John, Brynmor
Morris, Rt. Hn. John (Aberavon)
Stallard, A. W.


Johnson, James (K'ston-on-Hull, W.)
Mulley, Rt. Hn. Frederick
Stewart, Rt. Hn. Michael (Fulham)


Johnson, Walter (Derby, S.)
Murray, Ronald King
Stoddart, David (Swindon)


Jones, Barry (Flint, E.)
Oakes, Gordon
Stonehouse, Rt. Hn. John


Jones, Dan (Burnley)
Ogden, Eric
Strauss, Rt. Hn. G. R.


Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
O'Halloran, Michael
Summerskill, Hn. Dr. Shirley


Jones, Gwynoro (Carmarthen)
O'Malley, Brian
Swain, Thomas


Jones, T. Alec (Rhondda, W.)
Oram, Bert



Judd, Frank
Orbach, Maurice
Thomas,Rt.Hn.George (Cardiff,W.)


Kaufman, Gerald
Orme, Stanley
Thomas, Jeffrey (Abertillery)


Kelley, Richard
Owen, Dr. David (Plymouth, Sutton)
Tomney, Frank


Kerr, Russell
Palmer, Arthur
Tope, Graham


Kinnock, Neil
Pardoe, John
Torney, Tom


Lambie, David
Parker, John (Dagenham)
Tuck, Raphael


Lamborn, Harry
Parry, Robert (Liverpool, Exchange)
Varley, Eric G.


Latham, Arthur
Pavitt, Laurie
Wainwright, Edwin


Lawson, George
Peart, Rt. Hn. Fred
Walden, Brian (B'm'ham, All Saints)


Lewis, Arthur (W. Ham, N.)
Perry, Ernest G.
Walker, Harold (Doncaster)


Lewis, Ron (Carlisle)
Prentice, Rt. Hn. Reg.
Wallace, George


Lipton, Marcus
Probert, Arthur
Weitzman, David


Lomas, Kenneth
Rankin, John
Wells, William (Walsall, N.)


Lyon, Alexander W. (York)
Rees, Merlyn (Leeds, S.)
Whitehead, Phillip


Lyons, Edward (Bradford, E.)
Rhodes, Geoffrey
Whitlock, William


Mabon, Dr. J. Dickson
Richard, Ivor
Willey, Rt. Hn. Frederick


McBride, Neil
Roberts, Albert (Normanton)
Williams, Alan (Swansea, W.)


Mahon, Simon (Bootle)
Roberts, Rt. Hn. Goronwy (Caernarvon)
Wilson, Alexander (Hamilton)


Mallalieu, J. P. W. (Huddersfield, E.)
Robertson, John (Paisley)
Wilson, Rt. Hn. Harold (Huyton)


Marks, Kenneth
Roderick, Caerwyn E. Brc'n&amp;R'dnor)
Wilson, William (Coventry, S.)


Marquand, David
Roper, John



Marshall, Dr. Edmund
Rose, Paul B.
TELLERS FOR THE NOES:


Mason, Rt. Hn. Roy
Rowlands, Ted
Mr. James Hamilton and


Meacher, Michael
Sheldon, Robert (Ashton-under-Lyne)
Mr. Tom Pendry.


Mellish, Rt. Hn. Robert
Shore, Rt. Hn. Peter (Stepney)

Question accordingly agreed to.

Clause 13

POWER TO OBTAIN INFORMATION ABOUT RATES FROM RATING AND OTHER AUTHORITIES

8.30 p.m.

The Minister for Local Government and Development (Mr. Graham Page): I beg to move Amendment No. 11, in page 9, line 32 after 'order', insert 'made before 1st April 1974'.

Mr. Deputy Speaker (Miss Harvie Anderson): With this we can also discuss Government Amendments Nos. 12 and 13, and Amendment No. 44, in page 10, line 43 leave out subsections (6) and (7) and Government Amendment No. 53.

Mr. Page: These are amendments providing for a rating authority or precepting authority to furnish the Secretary of State, in this case the Secretary of State for the Environment, with information relative to a rate or precept recently

made or issued or proposed to be made or issued.
The purpose of the Government amendments is to limit the operation of Clause 13 to approximately one year except for matters arising from the operation of the clause within that period. This will enable the rates and precepts for the financial year 1973–74 and the following financial year to be monitored. This monitoring procedure is not being brought into operation by the Bill when it becomes an Act. It has to be activated by an order under Clause 13, although it can be done, and indeed is being done, by voluntary arrangements.
I make it absolutely clear that neither Clause 13 nor any of the amendments gives the Secretary of State the power to fix a rate or precept or to tell a local authority what rate or precept it should require. An order made tinder the clause will be merely an order to provide information, To have any validity, it will, if the amendments are accepted, have to be made before 1st April, 1974. If it is made and the information is not


forthcoming, the follow-up is a default order under subsection (8), which can be made before or after 1st April, 1974, and is enforceable under subsection (9).
Those are the ultimate legal sanctions attached to the monitoring process. The more the 99·9 per cent. of the 1,400 rating and precepting authorities co-operate, as I have good proof that they will, the more is it fair and just to have teeth in the clause so that it may bite on the 0·1 per cent. of the defaulters, if there are any.
I did not have the privilege of hearing the interesting debate on Clause 13 in Committee, but I have studied the OFFICIAL REPORT and it is evident that the permanent character of the clause as originally drafted caused great apprehension. It certainly caused me great apprehension when I read to what villainous uses right hon. and hon. Members in Committee thought the Government might put the powers in the clause. I had visions of the Minister for Local Government and Development in the dual rôle of a Machiavellian Mussolini with a bit of Dracula thrown in. I was not impressed by such visions.
The Government have no intention by the clause of creating either a permanent or a temporary relationship of "Big Brother" and "Little Brother" between central Government and local government.

Mr. Julian Ridsdale: Did my hon. Friend say that it is the Government's intention to monitor the rate for 1974–75?

Mr. Page: Yes. The Secretary of State will be able to take power under the clause, with the amendments, to monitor the rate for 1974–75.
As I say, we have no intention of acting as "Big Brother" over the local authorities. Although we frequently argue ferociously, there is a spirit of co-operation between my Department and the local authority associations. Because of that, it did not occur to me that the clause, as drafted, could be interpreted as such a vicious or mischievous clause as some hon. and right hon. Members thought in Committee.
In the debate in Committee my hon. Friend the Parliamentary Secretary to the

Civil Service Department sought to give an assurance as to the intended co-operative and temporary use of Clause 13, and he hinted that the powers in Clause 13 might not need to remain in perpetuity or until repealed and might march in step with the powers in Part II of the Bill.
In the amendment we have gone further than that in toning down the clause. We have restricted the powers under the clause to two rating years by allowing only one order-making year. In other words, if the orders made under the clause are to have validity, they must be made before 1st April 1974.
I think that that is as far as we can go or should go, for two reasons. One is set out in the White Paper, in paragraph 22, where it is pointed out that rates take such a large amount of household expenditure that they are an item which, if we have a counter-inflation policy as set out in this Bill, we should not leave out of that altogether. The other reason is that in local government finance central Government are a partner with local government, and not merely a sleeping partner: central Government contribute 60 per cent. of the expenditure of local government. In normal times we trust our partners, the local authorities, to spend it wisely. In times such as the present we have a duty to have a closer partnership in considering the expenditure. So this system of monitoring has been adopted.
Fortunately, we shall not, under the Bill when it becomes an Act, start off with no experience of monitoring. The actual operation has already started—since the announcement in the White Paper that we would be doing it.

Mr. Gordon Oakes: Under what authority is this being done at the moment?

Mr. Page: I would not have thought that any central Government needs authority to discuss matters with or obtain information from local authorities. This, indeed, is the whole basis of the relationship between central Government and local authorities. We are continually meeting the local authority associations. They provide information; we provide information. As I said just now, we sometimes argue furiously. I think the phrase used in Standing Committee was that the Government would be twisting


the arm of the local authorities. I can assure the House that the local authorities frequently twist the arm of the Government, and this so-called arm twisting is done in a spirit of co-operation between central Government and local government. It is in order for information to be given from each to each.
As I was saying, we have started monitoring. The White Paper was published on 17th January and on the same day a letter was written to the local authority associations by my Department pointing out the paragraph in the White Paper which related to the local authorities. On 22nd January we sent the local authority associations a draft of the circular and the form which might be used and be appropriate for the monitoring procedure. The Bill was published on 23rd January. We had a further long conference with the local authority associations on 24th January. Then was settled the circular and form on which information would be collected. As a result of that consultation on 24th January we redrafted the circular and the form, and showed it again to the local authority associations on 26th January. So there was continuous consultation with them during that period of time. The circular was finally dispatched to them on 2nd February. A letter and the form for collection of the information were dispatched on 7th February.
I can assure the House that it is a very simple form—a short letter on the form and about half a dozen notes—but it will enable us to be provided with the necessary information. Within three weeks of their receipt of that form 1,000 local authorities out of the 1,400 have replied. We have had only about a dozen staff working on this. Written replies have been given to 650 of those whose forms have been received. Where their finance committees were about to meet, answers were made by telephone. One hundred and ten have been asked to review their expenditure proposals, and as a result, so far, 16 authorities have responded by a reduction of the rate which they were intending to charge, those including one county and one London borough. In that short period reductions have emerged of £1½ million. That is a reasonable figure over that short period and shows that monitoring is worth while. How many more local authorities have

made a reduction before sending in the form, having been made to think twice before completing the form, I cannot say. I saw reported in the newspapers today that another county had reduced its rate by about £1 million.
8.45 p.m.
It is fair to ask: if the system is going well voluntarily, why put it in a statute? It is fair upon those who co-operate voluntarily that those who are bloody-minded and do not provide the information should be obliged to comply. The more local authorities there are which co-operate, the more reason there is to apply statutory force to those which do not.
It might be asked why we should have this system for only two rate-fixing periods. The need to counter inflation has come at a time when rate-fixing is of considerable complexity. This year there is revaluation, and the local authorities are looking forward in the coming year to reorganisation. In the next rate-fixing year 1974–75, local authorities will be in the throes of reorganisation, with the transfer of assets and liabilities, and so on. These are two complex years for rate-fixing. When that situation is coupled with inflation, central Government owe a duty to the public, who subsidise local authority expenditure by 60 per cent., to exercise a restraining influence.
When those situations are passed, we shall have sufficient co-operation and opportunity for discussion with local authorities under the rate support grant procedure to rely on the democratically elected local authorities to take such voluntary action as seems best in whatever inflationary circumstances may then exist.
It is right to take these powers, although the statutory force behind the present voluntary arrangement with the local authorities is exercised only by an order on an individual authority which must do what all the others are doing. The order does not apply over the whole local government area but applies specifically to one authority which fails to do what the others are doing.
In those general statements I have covered Amendments Nos. 11, 12 and 13. Amendment No. 53 is consequential on Amendment No. 13. Having set out


in the amendments those two rating years, 1973–74 and 1974–75, it was necessary to make the proviso concerning Scotland which appears at the end of subsection (6).
The Opposition Amendment No. 44 seeks to remove subsections (6) and (7), which are largely machinery subsections. When a rate is made there is power in law to make and issue a supplementary rate, but no such power to reduce it. It may well be that between the time of making a rate, which is the passing of the resolution and publishing the amount of the rate, to 1st April when it conies into operation, monitoring may have had the result of the local authority deciding that it wishes to reduce the rate. Without the present power it could not do so.
Subsection (6) provides the power to reduce the rate even after 1st April, and then subsection (7) comes into operation, dealing with the announcing and making certain that people know that there is that reduction in the rate. I look on these subsections as machinery which I trust will never need to be used. I am quite sure that the whole arrangement of monitoring can be carried out on a voluntary basis, and that the statutory power behind it is needed only as a longstop.

Mr. R. C. Mitchell: Where local authorities have been asked to reduce their expenditure and have found it very difficult to do so, would the Minister be prepared to meet delegations from those local authorities and advise them on how they should cut expenditure?

Mr. Page: The officials of the Department are always available to discuss that sort of thing with officials of a local authority. I cannot give an undertaking to see every local authority which might wish to discuss this subject, but if an hon. Member wished to see me and brought with him a member of the local authority I would not refuse to see him.

Mr. Denis Howell: The Minister will know that it is to this clause that local authorities and we on this side take the greatest possible objection. Even though the Government amendments represent a step backwards from the even more objectionable pro-

posals contained in the Bill as drafted, they still remain thoroughly objectionable to us all.
The whole of the right hon. Gentleman's speech proved positively that the clause is not necessary at all and that there is no reason whatever for this indignity being imposed on local authorities. We can only compare this monstrous interference with the freedom of our local authorities with everything the Government said at the last election about that same complete freedom of local authorities—"We shall remove the hand of Whitehall from local authorities", and so on. This present step demonstrates the measure of the deterioration of the Government's position, and I do not need to weary the House by reading large chunks of extracts from the Conservative Party manifesto at the last election and from speeches made in support of it.
The essence is that for the first time in the history of local government the Government propose to take powers to intervene directly in the making of the rate. That is a most serious matter. Such powers have not been taken by the central Government even in times of war and should not be taken except in circumstances of national calamity or dire emergency. What we now have presented to us is the measure of the economic difficulties which the Government have got themselves into and the crisis that presumably faces us.
As the Minister has said, these are powers to demand information, but the Government step back, having got the information, from directing authorities about what they should then do. The Government do not wish to take that responsibility. It could be argued that if the Government want this information in order to make a judgment about the rate to be levied in an area, they should accept the responsibility of saying what rate should properly be levied—and, indeed, how such a rate can effectively be levied. The powers amount to intimidation of certain local authorities.
Local authorities have conflicting duties during a period of inflation. On the one hand no local authority of the kind on which I have ever served wishes to levy a rate greater than that which is necessary to enable it to carry out its functions. On the other hand, however, it has a


duty to provide adequate services. A local authority has to provide for welfare services, the old and the sick, police services, education, housing and the rest. Each local authority is answerable to the electorate and it is the electors who have the final sanction, but a local authority must balance the need for the services demanded by residents against what it believes local residents can afford to pay to provide those services.
No judgment can be made about the rate to be levied by a local authority unless four questions are examined: first, the standard of services already provided by the local authority; secondly, the standard of services desired to be provided in future; thirdly, the question of national wage negotiations, which for all practical purposes are outside a local authority's control; and, fourthly, the consequences of cutting back on any service. Those four criteria need to be examined before we can make any judgment about the rate to be levied by a local authority.
It follows that certain questions must he asked about these powers. First, what Government machinery exists to conduct these examinations? Does the Ministry intend in detail to go through the estimates of every local authority and the information supplied to it? How does it propose to examine them and to relate what a local authority asks for this year as against what it asked for last year? Finally, how do the Government propose to relate both those matters to the standard of service provided? We have had no information whatever at any stage about any of these questions.
Even more important is the question whether the Government intend to accept public responsibility for the advice given to local authorities. In other words, if a local authority intends to proceed with its original proposals—and some Tory local authorities intend to proceed with their plans—where do the Government stand? Will they spell out what authority exists for what they propose? These are serious questions which must be answered.
I should like to illustrate how a local authority arrives at its rate and to show that when a local authority determines the rate that is to be levied, 99 per cent. of the amount which it asks ratepayers

to provide is totally outside the control of the local authority. It is almost totally determined by Government policy. If the Government wish to control the amount being levied, they have the power in their hands in terms of interest rates, wages, negotiations and standards of services and unless they involve themselves in these matters our local authorities are quite unable to control the situation on behalf of their ratepayers.
9.0 p.m.
To illustrate what I mean, I hope I may be allowed to cite the city of Birmingham which I represent and know very well. I have today gone in detail through its estimates to prove my point. In any event, I am sure that the illustration applies to most other local authorities.
The great city of Birmingham has decided that next year, after the most severe pruning, it must have an additional £18·5 million if it is to maintain existing services. That sum is made up largely of items which are wholly within the Government's control. The first item and one of the most important is interest rates. On debt charges alone, as a result of the increase in interest rates and the inescapable additions for matters which Birmingham is already committed, next year it has to find an additional £3 million.
The second item concerns pay awards, including the salaries of teachers, which are almost completely in the control of the Government since they have the casting vote on the Burnham Committee, and pay awards to policemen, firemen and other local authority employees as a result of salary increases already granted. Next year the Birmingham authority will have to find an additional £10·75 million here.
The Housing Finance Act is imposing additional administrative burdens on every local authority. If the Government really wanted to cut down the rates they would scrap the Housing Finance Act tomorrow and thereby make substantial savings. The cost to Birmingham of administering the Housing Finance Act will be £1 million. That is the size of the imposition upon Birmingham's ratepayers.
There are other inflationary increases. In terms of education, apart from salaries, there is an additional £500,000. On aid


to pupils in schools and grants to people going to universities and technical colleges, there is another £500,000. New superannuation regulations have been approved by the Government affecting local authority employees. They have come into force and represent an additional £370,000 which is totally inescapable to Birmingham and to every other local authority.
Urban renewal is a matter of great importance which has been urged upon the city by the appropriate Ministers. Next year that represents another £350,000.
Every one of those items is inescapable and necessary. Adding the lot up, the total comes to £18·25 million. Out of £18·5 million extra which Birmingham has to find next year, £18·25 million is totally inescapable and attributable to matters directly in the control of the Government.
The local authorities will take it badly from the Minister when he says that in normal times we trust our partners to spend wisely. Whether times are normal or abnormal, local authorities always spend very responsibly. Local councillors have to seek re-election. Every single one of them is up for re-election this year. That is the great saving grace of democracy in this country. They are not wasteful spenders of public money. This is not the year in which local authorities will spend unwisely. The case for Government intervention has not been made out.
I now turn to what the Government are doing. The Minister said that he was sending out a simple letter. How right he is. It could not be more simple. The letter tells local authorities that the Secretary of State does not like what they are proposing to do. It is a duplicated circular in which there are two empty spaces. In the first space will be filled in the percentage increase of rate expenditure, excluding housing, of the local authority to which it is sent. In the second space some genius in the Department, after a process which we know not but which we hope to learn today, will fill in an amount by which he expects that local authority to cut its estimates.
This letter is being sent to a number of selected authorities. Perhaps the Minister will tell us how many.

Mr. Graham Page: I told the hon. Gentleman that 110 local authorities have been asked to reconsider their rates.

Mr. Howell: I am grateful to the right hon. Gentleman for that information. Compared with the number of local authorities in the country as a whole, 110 is a very small proportion indeed, and immediately the point is conceded that the overwhelming number of local authorities are responsible people who cannot be reproached by the Government about their rate fixing.
I now turn to the 110 unfortunate recipients of this letter. We know of one or two of them from leaks in newspapers—Derbyshire, Hampshire, Teesside, Southampton, Bournemouth, Wirral and Denbighshire. They are not all great Labour authorities. The first question that I have to ask is on what authority the letter was sent out. The Minister is acting totally outside the law. His action is ultra vires. There is no authority for the Minister to make such an imposition on any responsible local authority. The power to act in this way will be available only when the Bill is passed, yet here we have the Minister taking administrative action on a Bill which has not gone through the House and which, when it reaches the other place, if the Law Lords are up to the standard of performance that we expect of them, might be there for a long time.
After the Bill has left this House, and while it is being discussed in detail in another place, it will be too late for it to have any effect on any rate levied by any local authority. The practicality of the situation is that even now treasurers are doing their work and finance committees are deciding what rate to levy. Indeed, the letter cannot be sent out until decisions have been taken on what rates to levy.
The Minister is behaving totally outside the law. If a trade union were to behave half as illegally as the right hon. Gentleman is doing, one can imagine the howl that would go up from the Conservative benches.

Mr. Graham Page: Come off it!

Mr. Howell: It is no good the Minister laughing and saying "Come off it". He is the great constitutional lawyer of the Conservative Party when it comes to matters of local government. On many occasions we have heard the right lion. Gentleman say that local authorities should obey the law and how trade unions were behaving disgracefully by acting illegally. Yet here we have an illegal action by the Minister on the basis of a power which does not exist. This is an extraordinary and ludicrous procedure.
The Government do not need this power, because the Minister has conceded that every local authority has already voluntarily sent him the information lie wants. Will the Minister tell us one authority which has refused? I do not believe that there is one authority which would not voluntarily provide this information. That being so, the clause is an impertinence and an unwarranted reflection upon the good quality and the spirit of co-operation which exists in local authorities.
Not only will local authorities want the sort of information contained in the letter about how much they should chop off their estimates: they will pin back on the Government the responsibility for telling them how this is to be achieved. Which services are to be cut back? Who are the people to be sacked in order to produce savings of this magnitude? Such savings as are specified in the letter cannot be achieved without a cutback on local authority staffs. In the case of Birmingham and the other authorities, the Government will have to say whether it is policemen or local authority doctors, for example, who will be sacked. Which section of employees is to be disposed of to bring about these substantial savings?
Hampshire County Council, which has a Conservative majority—the county is overflowing with Socialists—has received about £12 million extra from the Government this year. It is an extraordinary commentary on our present rating and financial aid system that such a situation has been developed. The large towns, which have all the difficulties and problems, are getting far less than the counties. I do not blame that entirely on the Government, but if it is a matter which concerns them they should deal with it this year and not in any future year. The

problem is now; the economic crisis, inflation and the prices and incomes policy are now. They are not in the future, but now.
When told that Hampshire proposed to transfer £3 million of this money to a contingency fund, the Government wrote to tell the council that it should not do so. The Conservative council has written back to tell the Minister—if I may express myself in polite parliamentary terms—that he should take more parsley and thyme with the turkey he eats. I do not blame Hampshire for expressing itself like that. What the Minister is proposing is a gross interference with Hampshire's autonomy and its local government obligations.
As I have said, the present formula for assistance to local government is totally obsolete. The Government have made much of the fact that they are giving 60 per cent. of the money required this year to each local authority, but we all know that there is a tremendous maldistribution in that 60 per cent., that some authorities are getting far more than 60 per cent. and that others, largely the big cities, are getting far less—in the 40 per cent. to 50 per cent. bracket. Birmingham, for example, will get 51 per cent. The difference for Birmingham alone between that 51 per cent. of Government help towards the rates next year and the 60 per cent. on which Ministers take their stand is £10 million. That is the hard cash difference for Birmingham alone.
9.15 p.m.
This is not a question that we can discuss in isolation. There are other matters. There is the question of revaluation, on which I should be out of order to proceed this evening—although perhaps I am entitled, as the Minister mentioned it, to ask when we shall have the promised statement on revaluation. Three or four weeks have passed since the Prime Minister met representatives of the large cities. We have had three or four weeks of Government inertia at a time when treasurers and finance committees have to make up their minds what rate should be levied. They cannot do that until they know what help the Government are to give them.

Mr. Dennis Skinner: The Cabinet have spat on them.

Mr. Howell: My hon. Friend may be right. The Government recognise the problem and they want to do something about it. But they do not have any money. They have got themselves into a financial jam. The ludicrous thing is that from this Dispatch Box we have repeatedly told the Government how to help and we have offered them help in order to solve the problem. But we have been totally rejected.
The whole of this exercise of Clause 13 is a piece of meaningless window dressing. In terms of aid to ratepayers it will be virtually useless. The clause is designed to camouflage the bankruptcy of Government policy and to transfer the responsibility for the increased burdens which ratepayers will have to face away from the Government, where it ought to lie, on to the backs of local authorities which are totally innocent in this matter. It is because this is a piece of political deception that we shall divide the House on the amendment.

Mr. Ridsdale: I have previously asked my right hon. Friend the Minister whether the monitoring would take place in the year 1974–75. I had hoped that that might give an indication of the Government's policy and intention to reform local government finance, and to do that in the way that I had hoped and not to continue with the policy of subsidy which is disguising so much the real cost of education and national charges and, because of the disguising of costs, causing us not to face up to the reality of Government spending.
It is for that reason and because of the urgency of the problem that I hope that my right hon. Friend will be able to give a promise soon, or give some indication of when we can expect something more in the reform of local government finance particularly in the form of taking some of the education burden off some of the authorities. I am sure that the Government could help on this matter.
The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) spoke about the problems of Birmingham. I can assure him that the problems of the county of Essex, where we face an increased rate of 24 per cent., are very considerable, particularly when one knows that the increase will have to be paid by 25,000 old-age pensioners in my con-

stituency in a total of 100,000 constituents.

Mr. Arthur Lewis: And by others.

Mr. Ridsdale: And by others on small fixed incomes and low wages. That is why I challenge whether the direction in which the Government are moving in subsidisation, although it will help them in the short term, is right in the long term, for which we need to see something more. That is why I find the clause such a disappointment. It shows nothing of the willingness to reform local government finance, but rather to continue along the lines on which we have been moving during the last five or six years, which has led us to the present extent of spending and the present burdens placed on so many people.
Therefore, I hope to hear from the Minister that something much more concrete in the long term will be done, although in the immediate future I realise that further help will have to be given through the rate subsidy if an unbearable burden is not to be placed on many of the people about whom I have spoken.

Mr. Geoffrey Rhodes: I certainly agree with the major point raised by the hon. Member for Harwich (Mr. Ridsdale). For a brief time I worked in a humble capacity in the Ministry of Housing and Local Government, as it then was, and I constantly urged upon the Minister the need for a radical transformation of the way in which we financed local government. I had spent the previous 10 years lecturing on the subject urging the same thing and I suspect that 20 years from now, if God is willing and I am still here, and I suppose if the electorate is willing, I will still be arguing the same principle. But I do not think that this argument is particularly relevant or useful in discussion of the amendment.
The Minister will know perfectly well that under Section 11, I think, of the Transport Act, which created the passenger transport authorities, these authorities have the power to levy a precept on the local authorities in their area. I think that was in 1968 and the unanimous decision was taken, including Conservative representatives from Newcastle-upon-Tyne, to accept the principle of free fares


during certain periods of the day and on certain days of the week for the elderly and the disabled of that city. The number of people who would benefit can be judged from the fact that in my constituency of 47,000 people there are nearly 14,000 who are over 60.
It was a unanimous decision but before very long the Conservatives on the Newcastle Council—I am sorry I am being parochial but the principle will emerge in a minute—decided to fight the scheme because the precept would cause too big a levy to be put on the local authority. They were also accompanied by representatives of the Castle ward of the rural district council, which is in the constituency of the Secretary of State for the Environment. They thought it was a burden that the working classes of the city could carry. Probably they in Castle ward could carry it because they are quite wealthy in that particular area.
The Secretary of State on his own initiative then wrote to the Tyneside Passenger Transport Authority requesting that the precept be reduced or abandoned for at least a year because of the rising cost of local government during the present financial year. This was interference with local government and it was interfering with the right of the mass of the local representatives of the area to determine what was socially desirable in their area. On Monday evening the Tyneside Passenger Transport Authority wrote back and told him, in its own local government style of language, "to get lost". It told him that it was going ahead with the scheme.
I should like to ask the Minister whether before 1st April it is the intention, under the clause, for the Secretary of State to interfere even further with local government in the area and order the Tyneside Passenger Transport Authority to succumb to the minority of the Conservatives who are opposed to the scheme. In Newcastle there are more Labour councillors than Conservative councillors but it merely happens that all 20 aldermen are members of the Conservative Party.
What will the Secretary of State do now? Will he beat a hasty retreat having done his duty by his local constituents? I spoke about cuts in local government expenditure in the House a fortnight ago

when I mentioned the other cut that it was rumoured was to be made. I am sorry that the Under-Secretary of State for the Environment is not in his place because I intend to refer to a letter he sent me today. I refer to the rumour that the smoke control scheme in the city of Newcastle, where the air is filthy and the rate of bronchitis stands among the highest in the country, was to be cut back as one of the cuts to be made in local government.
I told the Under-Secretary that I had organised 200 people, some of them members of his own party, who were prepared to go into the ward represented by the chairman of the finance committee and put him in his place in a few months' time if he went ahead with such a scheme. I am told that this morning Newcastle changed its mind. I am told that it no longer intends to abandon its smoke-control scheme, that it does not intend to leave the air on the eastern side of the city, which I represent, in its present filthy condition. Again, the Conservatives retreat.
As my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) said, every time we return to the question of over-spending we have a right to ask what the Conservatives will cut back. They will not cut back on smoke control. Are they going to cut back on concessionary fares for the aged? If not, what will they do? If they will not do anything, why do they want the amendment?
During the 1970 General Election campaign we heard a great deal about interfering with local government and the rights of local people to make their own decisions. Nearly all the local authorities were then controlled by the Conservatives. Now, when nearly ail of them are controlled by the Labour Party and even more will be so controlled after April and May, the local authorities' freedom to spend suddenly becomes a sin that is ruining the national economy. I have put this simple question in parochial terms, because it is in that way that the principles can be seen.
The other tactic was to blame everything on the council tenants. A blazing headline in the Newcastle Evening Chronicle the other night said:
Massive Blow to Ratepayers—Subsidies to Council Tenants to Spiral".


That made it look as though the Labour Party had forced upon the Conservative Council the abominable sin of making the owner-occupiers subsidise the council tenants, but it was an Act of the present Government that forced the situation upon the Newcastle-upon-Tyne City Council.
The Conservatives' tactics are simple. They blow up a storm over cutting back on smoke control and then say "We shall not do that. We are too kind". Next there is the fuss over concessionary fares for the old people. I think that the Conservatives will crawl down on that and say that they are helping the old people, but I should like to know the answer. Then they create a stir about council tenants, saying that rates must increase because the owner-occupiers have been made to finance people worse off than themselves.
As my hon. Friend the Member for Small Heath said, the increased cost of local government has little to do with the three points I have mentioned. It is a reflection of the breakdown of the Government's ability to carry out their pledge in 1970 to cut prices and hold back inflation. Having failed to cut back the cost of local government, they are using diversionary tactics to impress upon the public that it is not that they are bad but that they have so many wonderful services to pay for and that it is the Labour Party that is out to spend the ratepayers' money. That is a dirty tactic that has rightly been exposed by the Opposition.
I again pose my question. It has been said that 100,000 old and disabled people on Tyneside will gain free fares under the present legislation. Will the Secretary of State before 1st April force the Tyneside Passenger Transport Authority to cut back on that? Let him come clean before polling day. Let us have a bit of honesty in local government politics.

9.30 p.m.

Mr. Cant: I agree with those who hope that before too long we shall have a discussion of local government finance reform. In my 21 years as a member of a local authority I have never been more reminded of the dictum of Lord Keynes that it is the short run that matters because in the long run we are all dead. Local government is in a state of crisis.
If my Deputy Chief Whip had not just entered the Chamber, I should have liked to become involved in a long ideological discussion with the Minister. In all the years I have been a member of a local authority I have never felt so affronted by a Government. Yet the Government were supposed to be giving freedom to local authorites. But they did the same sort of thing in 1958 when the then Conservative Government introduced the new financial system, although they had previously said that they would dismantle all controls. This time the Conservative Party said that it would give local authorities a new freedom. But now the Government have the audacity to monitor local government finance. This is a consequence not of local government extravagance but of the Government's own massive incompetence. In fact, they have put us in such a mess that they must, I suppose, resort to almost any expedient.
It all reminds me of the Brazilian dictator who, when he came to office, said "We found the country on the edge of an abyss. Since then we have moved forward." No wonder the Government are monitoring local government finance. I have the greatest respect for the right hon. Gentleman, and had any other member of the Government come here to try to defend this situation I suspect that, lacking the respect we hold for the right hon. Gentleman, that Minister would have been hounded out of the Chamber.
We have had a brilliant analysis of the cause of the increases in local government spending. Of course some local authorities spend more per head than others. Some spend a good deal less. The crux of local government financial problems is simple—that many local authorities are spending more because of the reasons mentioned by my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell). But what is producing the crisis is not local government expenditure; that is just something seen in the context of the Bill.
The real crisis in local government expenditure is that two geographically contiguous local authorities can be faced with the same inflation, with the same growth in services, and yet one can have no increase in the rates and the other can have a 25 per cent. increase. I would like to develop this point, although the Deputy Chief Whip wants me to sit down.
Many cities are losing a great deal of their central Government rate support grant to the counties. That is the first problem. The second is our old friend, revaluation. I merely ask the right hon. Gentleman when he will make a statement to the House about how much he is going to give local authorities like Stoke-on-Trent and Birmingham which are in difficulty because they have been adversely affected by these factors.

Mr. Kenneth Marks: It was significant that when the Secretary of State for Employment moved the Second Reading of the Bill he went from Clause 12 to Clause 14 and had to be reminded that there was also a Clause 13. We have heard a great deal of what the clause is not. We are told that it is not to cut local authority rates, not to tell local authorities what to do. What, then, is Clause 13 supposed to do?
Local authorities are only too pleased to tell the Government about their problems with rates and how much will be needed to tackle those problems. The big city representatives have been trying for 10 weeks to tell the Prime Minister, the Secretary of State for the Environment and other Ministers precisely what the problems are. They have still had no repily. Treasiurers and councillors have worked for months preparing their estimates, knowing what inflation was taking place, knowing what they would have to tackle the next year. Now a staff of 12 in the Department of the Environment is to tell 1,400 local authorities what it thinks their rates ought to be. Will they understand the problems or will they just think of a number?
Liverpool was criticised by one Minister because it did not take account in last year's estimates of the likely inflation. What inflation has Liverpool to take account of next year? What about the duty which Ministers of Education, the Social Services and the Home Office have placed upon local authorities in the last 12 months? Are they not to go ahead with their nursery school plans? Manchester was criticised because last year it increased its social services budget by 37 per cent. Will the Government say that it is too much and that it should not be any more this year? Is Manchester to cut its police and fire service expenditure?
What about revaluation? We have argued about it for weeks in this House. Will the Government do anything about the imposition on many domestic ratepayers which will be caused by revaluation? If they do, who will pay? Will the Government or the ratepayers pay? When will the Prime Minister make the statement that he said he would make after consulting the big cities? The clause is quite unnecessary. The local authorities are prepared to give the information and they want to know what the Government think about it.

Mr. Gerald Kaufman: Will my hon. Friend emphasise the point that the big cities are in terrible trouble at the moment? Bristol has had to abandon fixing its rate because the Government have not told it what it will be. Manchester is fixing its rate on Friday without any information from the Government. Will my hon. Friend emphasise that speed is essential?

Mr. Marks: We have had six debates on this matter since December. If the Minister does not know, he has not been listening very hard. The fact is that Ministers have not been listening very hard. They have been trying to think of a political way out that will help their party.

Mr. John Roper: My hon. Friend the Member for Manchester, Gorton (Mr. Marks) referred to the problem of the big cities. It is sometimes misleading if it is assumed that the problems of rating are confined to the big cities. Urban district councils in my constituency and throughout the country are facing considerable difficulties. They are getting no information to give them an idea of when they may get some assistance. The Minister has given us no indication of the sort of help that can he given. It is no use producing a Counter-Inflation Bill unless something is clearly brought forward to deal with the substantial inflation which will be caused by the increase in rates in the near future.
One of the authorities in my constituency is now in a desperate position because, in spite of having written to the Secretary of State for the Environment on 9th February, it has still had no clear reply about its position. The Kearsley Urban District Council is not increasing


its expenditure by any extravagant amount. Its increase in net expenditure this year will be less than 2 per cent., yet I was told in a Written Answer yesterday that the average increase for domestic ratepayers in the Kearsley urban district on the proposals which have been returned by the council on the form FLA2 RM1 will mean an increase for the domestic ratepayers on average of 22 per cent.
That is a serious situation because the ratepayers of Kearsley do not understand the reason for the increase. They think that it is the fault of the Kearsley Urban District Council, which has increased its expenditure by only 2 per cent. The ratepayers, however, will be faced with a rate bill which will go up by 22 per cent. I hope that before we vote we will be given a clear indication of what the Minister intends to do to assist not only the big cities but the small authorities like the Kearsley Urban District Council.

Mr. Oakes: We have heard tonight from my hon. Friends that local authorities and local authority associations regard this clause, rightly, as an insult. The speech by the Minister for Local Government and Development, in which he said that even without statutory authority of any kind over 1,000 authorities out of 1,400 had already replied with the information required is proof positive that this clause is not needed. We have heard of the level of the insult from speeches on both sides of the House, in particular from my hon. Friends the Members for Newcastle-upon-Tyne, East (Mr. Rhodes), Manchester, Gorton (Mr. Marks), Stoke-on-Trent, Central (Mr. Cant) and Farnworth (Mr. Roper). The attitude of local authorities to this clause goes right across the board.
I want to speak not just about the insults of this clause but about the injury added to it by subsections (6) and (7). In opening the debate the right hon. Gentleman gave no indication why these subsections were needed. They remain in the Bill only as a result of the casting vote of the Chairman in Committee. Why do the Government insist upon them remaining in the Bill? Our Amendment No. 44, on which we will divide the House, is designed to

remove these injurious subsections. As the right hon. Gentleman has not explained why they are in the Bill I can only assume that they are in some way designed to facilitate some policy envisaged by the Prime Minister in connection with revaluation and helping local authorities. If this is so the right hon. Gentleman, who has vast experience of local government, must know that this is the worst possible way in which to attempt to deal with the problem.
What these subsections say is that where a local authority has struck a precept or rate it can subsequently change its mind, and, having done so, must repay to the ratepayers or the authority which paid the original sum the amount of the excess charged. This is in contradiction of what happens under the General Rate Act 1967. I can see no reason for these two subsections unless the Government intend to intervene, once a local authority has struck a rate, to twist the arm of that authority and demand that it in some way repays the ratepayer. If the Government wish to help local authorities they should do so by direct grant either to them or to the ratepayers. This method is the worst possible way of intervening and bears no relation to local government practice.
How can this clause work? Local authorities depend not only upon Government grants and rates but upon the investment of the public. That investment depends on the amount of the rate that is struck, so that investors know what the rate is. This clause allows a local authority to strike a rate and then change its mind. It must then repay the ratepayers. Do the Government realise the difficulties involved? Suppose a county council or a transport authority issues a precept. It then finds that too much money has been collected; but instead of putting that into a balance for the benefit of future ratepayers it has to repay that money. To whom is it repaid? To the ratepayers or the rating authority? On this the clause is silent. It merely says in subsection (7):
to ensure that any resulting overpayment made to the authority is refunded".
It does not say to whom. But we presume that it means that it is refunded to the ratepayers. Do the Government realise how difficult a job that will be for the


accounting departments of local authorities, which are already hopelessly overburdened with the work of local government reorganisation as well as water reorganisation and the many other functions they must undertake?
9.45 p.m.
Under the clause the authorities must find the ratepayer who has paid the rate and repay him so many pennies because, according to the clause, or the Government's arm-twisting, they had overestimated the rate. As the Minister more than anyone else in the House knows, the difficulty is accentuated by the fact that the repaying authorities may well not be the authorities which levied the rate, because we are at the crucial time of local government reorganisation and the new authority might involve several of the rating authorities which made the original rate.
Clearly, the clause cannot work, and I am at a loss to know why the Government have put it in the Bill, unless it is designed to deal with a future scheme for helping local authorities designed by the Prime Minister for which local authorities have been waiting for three weeks or a month. No decision has yet been made by the Government at this crucial time for local authorities.
This has been an interesting debate. I note, and I think hon. Members on both sides of the House will note, that the much-vaunted attention of members of the Liberal Party to local government problems has been evidenced by the fact that not one Liberal Member has been present throughout this debate.
The Minister said, perhaps in some sense of shame in view of his experience of local government matters, that the clause is a machinery clause. We hope to have subsections (6) and (7) deleted from what the Minister euphemistically described as a machinery clause. It will do tremendous injury to the future of local government. If it is a machinery clause, we seek, by our amendment, to remove the spanner from the works. I ask not only my right hon. and hon. Friends but hon. Members opposite who respect their colleagues in local government to reject the stupid subsections of this unnecessary clause.

Mr. Graham Page: With your leave, Mr. Speaker, and that of the House, may

I answer the points which have been made, particularly on the amendment proposing the removal of subsections (6) and (7) to which the hon. Member for Widnes (Mr. Oakes) addressed his remarks?
I still say that this is mainly a machinery clause. There is no impossibility about the return of part of a rate paid. It is done by claims for voids every day. There is provision in subsection (7) for those who are entitled to reclaim to make their claims. If the central Government and local government get together to consider the amount of the rate and the discussions take place at the eleventh hour before the rate is fixed, or even after the rate is made and before it is levied after 1st April, it is necessary that there should be opportunity to reconsider the rate fixed.
I repeat that the Government do not intend to deprive local authorities of the right to fix and levy a rate. The clause and the amendment do not give the Government the right to fix a rate or to tell a local authority what rate should be fixed. Nor does it give them any right to examine or cross-examine local authorities in the way described by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell). The hon. Gentleman asked: would the Government take public responsibility for the advice given to local authorities? Of course. They always do. He asked: where is the authority in this matter for asking these questions of local authorities? In fact, he waxed very warm on the question of my carrying out some illegal operation. Perhaps that is not quite the right phrase to use, but to use his own words, it was an extraordinary and ludicrous speech—to accuse a Minister of some illegal operation by writing a letter to a local authority asking about the rates which the local authority was fixing. Is he really suggesting that a Minister needs the authority of Parliament to write a letter such as that? It really is ludicrous.

Mr. Denis Howell: If the Minister does not need the authority of Parliament to do it, what is this clause here for? What is it all about? What we were objecting to was the writing to local authorities telling them by how much to reduce their rates. What the Government are seeking is power without responsibility—as a former Tory Prime Minister once said,


the prerogative of the harlot down the ages.

Mr. Page: I am sure the hon. Gentleman would object strongly if we took the responsibility of fixing the local authorities' rates. That is exactly what we are not doing. If I may read the phrase in that letter which the hon. Gentleman says I was issuing illegally, I will quote it:
The council are accordingly asked to review their proposals with the objective of reducing expenditure by an amount—
and the figure is given in the letter. Is it really an illegal act to write a letter like that to a council? The hon. Gentleman might have got a better case than that on which to base his argument, instead of spending at least 10 minutes accusing of me of an illegal act.
The hon. Gentleman then recited various items of expenditure by Birmingham, and, quite rightly, pointed out that for much of this Birmingham is not directly responsible and that it arises from financial obligations placed on local authorities by the central Government, and for which a local authority has little discretion in fixing the amounts. Of course, in any local authority's rate bill one finds those items, but in the circular relating to the form on which information was to be collected we made a specific point of this fact, that what we were concerned with in the completion of the form were factors over which the local authorities themselves have "direct control"—that phrase comes into the circular which was sent out—making it perfectly clear to a local authority that it could come back and say to us "You, the central Government, are responsible for these items, we are responsible for expenditure on those items, and now let us discuss the latter"—because it is on those that there might be some saving. The very fact that there has been a saving out of this process already, in the first three weeks, of £1½ million shows that discussion in this way with the local authorities and co-operation between the central Government and local government are capable of saving the ratepayers money.
My hon. Friend the Member for Harwich (Mr. Ridsdale) asked about local government finance reform and when it would be announced. We

announced that we would in due course be bringing in a local government finance Bill and that if it were delayed there would be a White Paper describing the intentions of the Bill.
The hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes) asked whether it was our intention under this Bill to interfere with the precept of the PTA in Newcastle. My answer is that there is no power in this Bill to make any such order or interference in a case of that sort.

Mr. Rhodes: The right hon. Gentleman knows perfectly well that under the Transport Act 1968 he has power to instruct a local authority to reduce the precept upon the local authority if he considers it to be excessive, or to delay the precept if he considers it to be bad in that year. That may not come under this clause, but it would be honest if he were to explain to the local authorities whether his right hon. Friend is intending to use that power and will tell them before the local elections.

Mr. Page: I am not discussing the Transport Act. If I branched off into a debate on the Transport Act I should be ruled out of order.
The hon. Member for Stoke-on-Trent, Central (Mr. Cant) made the valid point that under the present rate support grant formula where there are two towns with the same sort of growth one town may recover a great deal from the resources element and the other may not. With revaluation this has shown up more than previously. For example, Bristol has had a resources element grant for the first time. Sheffield and Leeds have had their resources element grant increased. It is not one-sided.
The hon. Member for Small Heath did not address his mind to Clause 13. It does not allow the Secretary of State to make an order fixing a rate. It allows him to make a specific order if a local authority fails to provide information for which it is asked. I hope that orders will not be necessary. I do not mind hon. Gentlemen on the Opposition benches saying that this provision may be unnecessary. It may well be unnecessary, but for the sake of the local authorities which co-operate it is right to have statutory backing.
There has been criticism of the central Government for failing to provide money


for local government. I remind the House that in the rate support grant this year the Government contributed to local government expenditure £400 million more than last year. The domestic element was increased by 50 per cent. and next year, by reason of Bills going through Parliament, £350 million will be removed from rate expenditure. I have said that we shall be carrying the reform of local government finance further in a future Bill dealing with that subject.
I hope that the House will accept the Government amendments and reject Amendment No. 44.

Amendment agreed to.

Amendment made: No. 12, in page 9, line 36, leave out from beginning to end of line 39 and insert:

'(a) any rate made, or precept or requisition issued, by the authority for the financial year 1973–74 or any part of that year, or
(b) any rate, precept or requisition which they propose to make or issue for the financial year 1973–74 or 1974–75 or any part of either of those years'.—[Mr. Graham Page.]

Amendment proposed: No. 44, in page 10, line 43, leave out subsections (6) and (7).—[Mr. Denis Howell.]

Question put, That the amendment made:—

The House divided: Ayes 205, Noes 274.

Division No. 73.]
AYES
[9.58 p.m.


Abse, Leo
Ellis, Tom
Lyon, Alexander W. (York)


Allaun, Frank (Saltord, E.)
English, Michael
Lyons, Edward (Bradford, E.)


Archer, Peter (Rowley Regis)
Evans, Fred
Mabon, Dr. J. Dickson


Ashley, Jack
Fisher, Mrs. Doris(B'ham,Ladywood)
McBride, Neil


Atkinson, Norman
Fitch, Alan (Wigan)
McGuire, Michael


Barnett, Guy (Greenwich)
Fletcher, Raymond (Ilkeston)
Mahon, Simon (Bootle)


Barnett, Joel (Heywood and Royton)
Fletcher, Ted (Darlington)
Mallalieu, J. P. W. (Huddersfield, E.)


Beaney, Alan
Foot, Michael
Marks, Kenneth


Benn, Rt. Hn. Anthony Wedgwood
Ford, Ben
Marquand, David


Bidwell, Sydney
Forrester, John
Marshall, Dr. Edmund


Blenkinsop, Arthur
Fraser, John (Norwood)
Mason, Rt. Hn. Roy


Boardman, H. (Leigh)
Freeson, Reginald
Meacher, Michael


Booth, Albert
Galpern, Sir Myer
Mellish, Rt. Hn. Robert


Bottomley, Rt. Hn. Arthur
Gilbert, Dr. John
Mendelson, John


Boyden, James (Bishop Auckland)
Ginsburg, David (Dewsbury)
Mikardo, Ian


Bradley, Tom

Millan, Bruce


Broughton, Sir Alfred
Grant, John D. (Islington, E.)
Miller, Dr. M. S.


Brown, Hugh D. (G'gow, Provan)
Griffiths, Eddie (Brightside)
Milne, Edward


Brown, Ronald (Shoreditch &amp; F'bury)
Griffiths, Will (Exchange)
Mitchell, R. C. (S'hampton, Itchen)


Buchan, Norman
Hamilton, James (Bothwell)
Molloy, William


Butler, Mrs. Joyce (Wood Green)
Hamilton, William (Fife, W.)
Morgan, Elystan (Cardiganshire)


Callaghan, Rt. Hn. James
Hardy, Peter
Morris, Alfred (Wythenshawe)


Cant, R. B.
Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)


Carmichael, Nell
Hattersley, Roy
Morris, Rt. Hn. John (Aberavon)


Carter, Ray (Birmingh'm, Northfield)
Healey, Rt. Hn. Denis
Mulley, Rt. Hn. Frederick


Carter-Jones, Lewis (Eccles)
Heifer, Eric S.
Murray, Ronald King


Castle, Rt. Hn. Barbara
Hooson, Emlyn
Oakes, Gordon


Clark, David (Colne Valley)
Houghton, Rt. Hn. Douglas
Ogden, Eric


Cohen, Stanley
Howell, Denis (Small Heath)
O'Halloran, Michael


Coleman, Donald
Huckfield, Leslie
O'Malley, Brian


Concannon, J. D.
Hughes, Rt. Hn. Cledwyn (Anglesey)
Oram, Bert


Corbet, Mrs. Freda
Hughes, Roy (Newport)
Orbach, Maurice


Cox, Thomas (Wandsworth, C.)
Hunter, Adam
Orme, Stanley


Crawshaw, Richard
Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Owen, Dr. David (Plymouth, Sulton)


Cronin, John
Janner, Greville
Palmer, Arthur


Crosland, Rt. Hn. Anthony
Jay, Rt. Hn. Douglas
Pardoe, John


Cunningham, G. (Islington, S.W.)
Jenkins, Hugh (putney)
Parker, John (Dagenham)


Dalyell, Tarn
John, Brynmor
Parry, Robert (Liverpool, Exchange)


Davies, Denzll (Llaneliy)
Johnson, James (K'ston-on-Hull, W.)
Pavitt, Laurie


Davies, Ifor (Gower)
Johnson, Walter (Derby, S.)
Peart, Rt. Hn. Fred


Davis, Clinton (Hackney, C.)
Jones, Barry (Flint, E.)
Perry, Ernest G.


Davis, Terry (Bromsgrove)
Jones, Dan (Burnley)
Prentice, Rt. Hn. Reg.


Deakins, Eric
Jones,Rt.Hn.Sir Eiwyn(W.Ham,S.)
Probert, Arthur


de Freltas, Rt. Hn. Sir Geoftrey
Jones, Gwynoro (Carmarthen)
Rees, Merlyn (Leeds, S.)



Jones, T. Alec (Rhondda, W.)
Rhodes, Geoffrey



Judd, Frank
Richard, Ivor


Delargy, Hugh
Kaufman, Gerald
Roberts, Albert (Normanton)


Dell, Rt. Hn. Edmund
Kelley, Richard
Roberts, Rt. Hn. Goronwy (Caernarvon)


Dempsey, James
Kerr, Russell
Robertson, John (Paisley)


Douglas, Dick (Stirlingshire, E.)
Kinnock, Neil
Roderick, Caerwyn E.Brc'n&amp;R'dnor)


Douglas-Mann, Bruce
Lambie, David
Roper, John


Driberg, Tom
Lamborn, Harry
Rose, Paul B.


Duffy, A. E. P.
Latham, Arthur
Rowlands, Ted


Dunn, James A.
Lawson, George
Sheldon. Robert (Ashton-under-Lyne)


Eadie, Alex
Lewis, Arthur (W. Ham, N.)
Shore, Rt. Hn. Peter (Stepney)


Edelman, Maurice
Lewis, Ron (Carlisle)
Short, Mrs. Renée (W'hampton.N.E.)


Edwards, Robert (Bllston)
Lipton, Marcus
Silkin, Rt. Hn. John (Deptford)


Edwards, William (Merioneth)
Lomas, Kenneth
Silkin. Hn. S. C. (Dulwich)




Sillars, James
Swain, Thomas
Wells, William (Walsall, N.)


Silverman, Julius
Thomas,Rt.Hn.George (Cardiff,W.)
Whitehead, Phillip


Skinner, Dennis
Thomas, Jeffrey (Abertillery)
Whitlock, William


Small, William
Tomney, Frank
Willey, Rt. Hn. Frederick


Smith, John (Lanarkshire, N.)
Tope, Graham
Williams, Alan (Swansea, W.)


Spearing, Nigel
Torney, Tom
Wilson, Alexander (Hamilton)


Spriggs, Leslie
Tuck, Raphael
Wilson, Rt. Hn. Harold (Huyton)


Stallard, A. W.
Varley, Eric G.
Wilson, William (Coventry, S.)


Stewart, Rt. Hn. Michael (Fulham)
Wainwright, Edwin



Stoddart, David (Swindon)
Walden, Brian (B'm'ham, All Saints)
TELLERS FOR THE AYES:


Stonehouse, Rt. Hn. John
Walker, Harold (Doncaster)
Mr. Michael Cocks and


Strauss, Rt. Hn. G. R.
Wallace, George
Mr. Tom Pendry


Summerskill, Hn. Dr. Shirley
Weitzman, David





NOES


Adley, Robert
Fidler, Michael
Kimball, Marcus


Alison, Michael (Barkston Ash)
Finsberg, Geoffrey (Hampstead)
King, Tom (Bridgwater)


Allason, James (Hemel Hempstead)
Fisher, Nigel (Surbiton)
Kinsey, J. R.


Archer, Jeffrey (Louth)
Fletcher-Cooke, Charles
Kitson, Timothy


Astor, John
Fookes, Miss Janet
Knight, Mrs. Jill


Atkins, Humphrey
Fortescue, Tim
Knox, David


Awdry, Daniel
Foster, Sir John
Lamont, Norman


Baker, Kenneth (St. Marylebone)
Fowler, Norman
Langford-Holt, Sir John


Baker, W. H. K. (Banff)
Fox, Marcus
Le Marchant, Spencer


Batsford, Brian
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Lewis, Kenneth (Rutland)


Beamish, Col. Sir Tufton
Fry, Peter
Lloyd, Ian (P'tsm'th, Langstone)


Bennett, Sir Frederic (Torquay)
Galbraith, Hn. T. G. D.
Longden, Sir Gilbert


Bennett, Dr. Reginald (Gosport)
Gardner, Edward
Loveridge, John


Benyon, W.
Gibson-Watt, David
Luce, R. N.


Berry, Hn. Anthony
Gilmour, Ian (Norfolk, C.)
McAdden, Sir Stephen


Biffen, John
Gilmour, Sir John (Fife, E.)
MacArthur, Ian


Biggs-Davison, John
Glyn, Dr. Alan
McCrindle, R. A.


Blaker, Peter
Godber, Rt. Hn. J. B.
McLaren, Martin


Boardman, Tom (Leicester, S.W.)
Goodh[...]t, Philip
Maclean, Sir Fitzroy


Body, Richard
Goodhew, Victor
McMaster, Stanley


Boscawen, Hn. Robert
Gorst, John
Macmillan, Rt.Hn.Maurice (Farnham)


Bossom, Sir Clive
Gower, Raymond
McNair-Wilson, Michael


Braine, Sir Bernard
Grant, Anthony (Harrow, C.)
McNair-Wilson, Patrick (New Forest)




Maddan, Martin


Bray, Ronald
Gray, Hamish
Madel, David


Brewis, John
Green, Alan
Maginnis, John E.


Brinton, Sir Tatton
Grieve,Percy
Marten Neil


Brockiebank-Fowler, Christopher
Griffiths, Eldon (Bury St. Edmunds)
Mather, Carol


Brown, Sir Edward (Bath)
Grylls, Michael
Maude, Angus


Bruce-Gardyne, J.
Gummer, J. Selwyn
Maudling, Rt. Hn. Reginald


Bryan, Sir Paul
Gurden, Harold
Mawby, Ray


Buchanan-Smith, Alick (Angus,N&amp;M)
Hall, Miss Joan (Keighley)
Maxwell-Hyslop, R. J.


Buck, Antony
Hall, John (Wycombe)
Miscampbell, Norman


Bullus, Sir Eric
Hall-Davis, A. G. F.
Mitchell, Lt.-Col.C. (Aberdeenshire, W)


Burden, F. A.
Hamilton, Michael (Salisbury)
Mitchell, David (Basingstoke)


Butler, Adam (Bosworth)
Hannam, John (Exeter)
Moate, Roger


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Harrison, Brian (Maldon)
Molyneaux, James


Carlisle, Mark
Harrison, Col. Sir Harwood (Eye)
Money, Ernie


Carr, Rt. Hn. Robert
Haselhurst, Alan
Monks, Mrs. Connie


Channon, Paul
Hastings, Stephen
Montgomery, Fergus


Chapman, Sydney
Havers, Sir Michael
More, Jasper


Chataway, Rt. Hn. Christopher
Hawkins, Paul
Morgan-Giles, Rear-Adm.


Clark, William (Surrey, E.)
Hayhoe, Barney
Morrison, Charles


Clarke, Kenneth (Rushcliffe)
Heseltine, Michael
Mudd, David


Clegg, Walter
Hicks, Robert
Nabarro, Sir Gerald


Cockeram, Eric
Higgins, Terence L.
Neave, Airey


Cooke, Robert
Hiley, Joseph
Nicholls, Sir Harmar


Coombs, Derek
Hill, John E. B. (Norfolk, S.)
Noble, Rt. Hn. Michael


Corfleld, Rt. Hn. Sir Frederick
Hill, S. James A.(Southampton, Test)
Normanton, Tom


Costain, A. P.
Holland, Philip
Nott, John


Critchley, Julian
Holt, Miss Mary
Onslow, Cranley


Crowder, F. P.
Hordern, Peter
Oppenheim, Mrs. Sally


Davies, Rt. Hn. John (Knutsford)
Hornby, Richard
Orr, Capt. L. P. S.


d'Avigdor-Goldsmid, Sir Henry
Hornsby-Smith,Rt.Hn.Dame Patricia
Osborn, John


d'Avigdor-Goldsmid,Maj.-Gen.Jack
Howe, Rt. Hn. Sir Geoffrey
Owen, Idris (Stockport, N.)


Dean, Paul
Howell, David (Guildford)
Page, Rt. Hn. Graham (Crosby)


Deedes, Rt. Hn. W. F.
Hunt, John
Parkinson, Cecil


Dixon, Piers
Hutchison, Michael Clark
Peel, Sir John


Dodds-Parker, Sir Douglas
Iremonger, T. L.
Percival, Ian


Drayson, G. B.
Irvine, Bryant Godman (Rye)
Peyton, Rt. Hn. John


du Cann, Rt. Hn. Edward
James, David
Pink, R. Bonner


Dykes, Hugh
Jenkin, Patrick (Woodford)
Price, David (Eastleigh)


Edwards, Nicholas (Pembroke)
Jennings, J. C. (Burton)
Prior, Rt. Hn. J. M. L.


Elliot, Capt. Walter (Carshalton)
Jessel, Toby
Proudfoot, Wilfred


Elliott, R. W. (N'c'tle-upon-Tyne,N.)
Johnson Smith, G. (E. Grinstead)
Pym, Rt. Hn. Francis


Emery, Peter
Jones, Arthur (Northants, S.)
Raison, Timothy


Eyre, Reginald
Kaberry, Sir Donald
Ramsden, Rt. Hn. James


Farr, John
Keilett-Bowman, Mrs. Elaine
Rawlinson, Rt. Hn. Sir Peter


Fenner, Mrs. Peggy
Kilfedder, James
Redmond, Robert







Reed, Laurence (Bolton, E.)
Stainton, Keith
Waddington, David


Rees, Peter (Dover)
Stanbrook, Ivor
Walder, David (Clitheroe)


Rees-Davies, W. R.
Stewart-Smith, Geoffrey (Belper)
Walker, Rt. Hn. Peter (Worcester)


Renton, Rt. Hn. Sir David
Stodart, Anthony (Edinburgh, W.)
Walker-Smith, Rt. Hn. Sir Derek


Rhys Williams, Sir Brandon
Stoddart-Scott, Col. Sir M.
Wall, Patrick


Ridley, Hn. Nicholas
Stokes, John
Ward, Dame Irene


Ridsdale, Julian
Stuttaford, Dr. Tom
Warren, Kenneth


Roberts, Michael (Cardiff, N.)
Sutcliffe, John
Weatherill, Bernard


Roberts, Wyn (Conway)
Tapsell, Peter
Wells, John (Maldstone)


Rodgers, Sir John (Sevenoaks)
Taylor, Sir Charles (Eastbourne)
White, Roger (Gravesend)


Rossi, Hugh (Hornsey)
Taylor, Edward M.(G'gow, Cathcart)
Wiggin, Jerry


Rost, Peter
Taylor, Frank (Moss Side)
Wilkinson, John


Russell, Sir Ronald
Taylor, Robert (Croydon, N.W.)
Winterton, Nicholas


Sandys, Rt. Hn. D.
Tebbit, Norman
Wolrige-Gordon, Patrick


Scott, Nicholas
Temple, John M.
Wood, Rt. Hn. Richard


Shaw, Michael (Sc'b'gh &amp; Whitby)
Thatcher, Rt. Hn. Mrs. Margaret
Woodnutt, Mark


Shelton, William (Clapham)
Thomas, Rt. Hn. Peter (Hendon, S.)
Worsley, Marcus


Shersby, Michael
Thompson, Sir Richard (Croydon, S.)
Wylie, Rt. Hn. N. R.


Simeons, Charles
Tilney, John
Younger, Hn. George


Sinclair, Sir George
Trew, Peter



Skeet, T. H. H.
Tugendhat, Christopher
TELLERS FOR THE NOES


Soref, Harold
Turton, Rt. Hn. Sir Robin
Mr. Michael Jopling and


Speed, Keith
van Straubenzee, W. R.
Mr. Oscar Murton.


Spence, John
Vaughan, Dr. Gerard



Sproat, Iain
Vickers, Dame Joan

Question accordingly negatived.


It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That the Counter-Inflation Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Weatherill.]

COUNTER-INFLATION BILL

As amended in the Standing Committee, further considered.

Amendments made: No. 13, in line 45, leave out from beginning to end of line 46 and insert—

'(a) made a rate for the financial year 1973–74 or 1974–75 or any part of either of those years, or
(b) issued a precept or requisition in respect of any such period,'.—[Mr. Graham Page.]

No. 53, in page 11, line 5, leave out from beginning to end of line 7.—[Mr. Graham Page.]

Clause 14

OFFENCES

Mr. Bruce-Gardyne: I beg to move Amendment No. 45, in page 11, line 44, after 'Act', insert
or to secure the establishment of an independent inquiry into terms and conditions of employment under which that organisation or person is employed".
I should perhaps make it clear that this is basically a probing amendment. I am anxious to ascertain how the Government interpret the legal provisions in this legislation governing industrial action.
The sensible purpose of the amendment is to lay down that, just as it is stated to be illegal in Clause 14 for a person or group of persons to organise industrial action in pursuit of a wage claim which has been found to be in excess of the diktat of the Pay Board, so it would be against the letter of the law for a group of employees to take industrial action to secure the establishment of an independent inquiry into terms and conditions of employment which in turn was designed to achieve a settlement over and above the limits which my right hon. and hon. Friends have chosen.
This is not an entirely academic proposition. Certainly it is not if one is to judge from the pages of New Statesman, which I confess is not my normal bedtime reading but which occasionally I dip into, the current issue of which carries a report from its industrial correspondent, Mr. Peter Patterson, who writes:
Obviously the Government is taking a serious step in making strikes over pay illegal.
As I understand it, the Government are not doing that. What they are doing is to make provision whereby if a strike occurs against a settlement which has received the blessing of the very aptly named Sir Frank Figgures and his Pay Board, my right hon. and hon. Friends may seek legal powers to prevent this action being pursued.
Mr. Patterson writes:
Obviously the government is taking a serious step in making strikes over pay illegal. However, even its most totalitarian mood is relieved by incompetence. …
Let me hasten to say that those are Mr. Patterson's words and not mine.
… for the Counter-Inflation Bill seems to be so narrowly drawn that, provided the union declares that the purpose of its strike is to secure a court of inquiry into the grievances of its members rather than to force the employer to raise wages above the norm, the government might well fail to get a conviction. That, at least, is what several union leaders are hoping.
It might be as well before we complete the Report stage to know from the Government whether the hopes which are attributed in that article to union leaders are justified. If they are not, I submit that a slightly worrying conclusion has to be drawn.
We must recognise that if industrial action is taken on a basis which is in no way illegal under this legislation but where the rejection of the Pay Board's decision on the demands of the employees involved would itself be illegal, the company which is struck against will find itself in an unfortunate position.
10.15 p.m.
Let us assume for the sake of argument that in the recent dispute—which I understand is now concluded—between BRS and BLMC the union members had been striking for an independent court of inquiry under phase 2 into their claim in order to achieve a settlement in excess of the guidelines which


my hon. Friends have laid down for phase 2. If British Leyland were prepared to give them a settlement in excess of the guidelines, presumably my right hon. Friends would proceed against it by order and it could find itself having the increases disallowed.
If, on the other hand, British Leyland, were to resist such a strike—in other words, a strike designed to secure the establishment of an independent court of inquiry which in turn was intended to provide a settlement in excess of the guidelines laid down for phase 2—presumably it—or any company in a similar situation—could find itself driven into bankruptcy by the operation of this legislation.
In other words, by resisting a strike which was not itself illegal to the point at which its liquid resources were exhausted the company could be driven into bankruptcy, at which point, I suppose, my right hon. Friends would bring before us the British Leyland Public Ownership Bill. I have to tell my right hon. Friends that there are some of us—certainly myself—who would look upon such legislation with precious little favour, although one would hardly be able to deny the carrying through of such legislation since the House of Commons had willed the means and could hardly complain at the end.
I think that we should have a clear indication from my right hon. Friends about the precise legal position of industrial disputes under phase 2. If it be the case that it will be in order for any union to go on strike in order to achieve a better settlement than that which is available to it under the guidelines of phase 2 provided it says that the purpose of the strike is simply to secure the establishment of an independent inquiry to achieve its ends, the House should know that that is the case before we complete the Report stage of the Bill.

Mr. Maurice Macmillan: I think it is fairly clear what the legal position will be once the Bill has received the Royal Assent and become an Act. Strikes over pay will not be illegal. Strikes against settlements will not be illegal. Strikes against an order or notice under the Bill will not be illegal. What will be illegal is action in calling, organizing, procuring or financing a strike, or threat-

ening to do so, organising, procuring or financing any irregular industrial action short of a strike, or threatening to do so, against an order made under Clause 5 or against an order or notice made by the Pay Board under Clause 7.
I think that the situation which my hon. Friend described is a factor of a transitional situation where the purpose of the industrial action is to secure in stage 2 of the counter-inflation policies a settlement which is contrary to those policies. The situation envisaged by my hon. Friend could not happen after the passage of the Bill, because it would be regarded as threatening to do so once a notice or order had been made.
I will, however, look at the situation which my hon. Friend has exposed. I understand that it is improbable that it will arise, but if there is a loophole I will certainly consider it. There is no intention to make striking itself illegal, but only the calling, procuring, or financing of a strike or irregular industrial action short of a strike——

Mr. Russell Kerr: There is no difference.

Mr. Macmillan: There is a considerable difference. We debated this in Committee. The difference is that it is the union which is liable rather than the individual. The powers are admittedly rather less strong than they have been before, but they are adequate to deal with the situation in which action is taken against an order made under Clause 5 or an order or notice of the Pay Commission under Clause 7, which are the only offences under those clauses.

Mr. Biffen: The House is indebted to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) for raising this point. What one wishes to avoid in this legislation is providing some kind of martyr's charter for some activist or other whose motivation in industrial disputes may be somewhat wider than merely the securing of enhanced remuneration for those involved in the disputes.
Although my right hon. Friend seemed to preclude the possibility of there being a strike to secure the establishment of an independent inquiry and said that the offence could arise only as a result of industrial action to prevent the implementation of an order or notice, the fact


remains that the Secretary of State himself has the right to overrule and disagree with an order or notice served by one of the agencies. What certain sophisticated militants will be looking at when considering this legislation is whether or not they can call a dispute the purpose of which is to induce my right hon. Friend to override a judgment of the agency, to overrule an order or notice served by the Pay Commission.
I hope that this point, in addition to that mentioned by my hon. Friend, will exercise the minds of the Government. If it cannot be answered tonight I fully understand, but I hope it will be taken into account when the legislation proceeds to another place. Those of us who faithfully, unanimously and through the night, on the recurring three-line Whips, voted for the Industrial Relations Act did not precisely foresee the consequences which were to flow from it.
We are therefore entitled to try to spot the "Pentonville Five" of the next generation. If we do not, we shall be failing in an elementary duty laid upon us by recent experience. I hope that my right hon. Friend will bear these points in mind and will ensure that before the Bill receives the Royal Assent we shall be spared some of the embarrassments that we received under the Industrial Relations Act.

Mr. Bruce-Gardyne: I understand that my right hon. Friend is giving an assurance that he will investigate the position and let us know the precise legal situation of a strike called after the passage of a notice or order in order to obtain an independent court of inquiry, presumably to arrive at another solution than that contained in the notice or order. On that understanding, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16

APPLICATION TO SCOTLAND

The Lord Advocate (Mr. Norman Wylie): I beg to move Amendment No. 14, in page 14, line 18, leave out first 'made' and insert 'having effect'.
I explained in Committee that Clause 16(2)(b) sought to re-enact for the pur-

poses of Scotland the provisions of Clause 14(7), for certain reasons which I explained. There was one respect in which the subsection did not comply with the provisions of Clause 14(7); namely the opening words
Nothing contained in or having effect under this Act".
This is more than a drafting amendment. It goes further than simply bringing Clause 16(2)(b) into line with the provisions of Clause 14(7). It is necessary to cover the situation not only of what is done under the Bill but in respect of orders and directions given under powers conferred by the Bill when it becomes an Act.

Amendment agreed to.

Clause 18

INTERPRETATION

Mr. Maurice Macmillan: I beg to move Amendment No. 15 in page 16, line 20, at end insert 'or by a Minister'.
This is a purely consequential amendment following the passage of new Clause 1, which gives powers to the Secretary of State for Trade and Industry to control insurance premiums. It is also needed if the House is to pass, as I hope it will, Amendments Nos. 22 and 54 to enable Ministers as well as agencies to deal with the question of publication on price matters, pay matters and insurance matters. The amendment is consequential on those matters.

Mr. Bean: I greatly welcome what the Secretary of State has said. This amendment giving the Secretary of State for Trade and Industry much greater power over the insurance industry moves us closer to the day when there will be greater public control and, indeed, public ownership of the insurance industry. Therefore, I support the amendment.

Amendment agreed to.

Clause 19

DURATION

Amendment made: No. 16, in page 17, line 16, leave out Clause 19.—[Mr. Maurice Macmillan.]

Schedule 1

THE AGENCIES

Amendment made: No. 17, in page 18, line 3, at end insert—

'PART I

AGENCIES' FUNCTIONS UNDER PART II

1.—(1) Each Agency shall in accordance with this paragraph make reports to the Secretary of State on the way they have discharged their functions under Part II of this Act.

(2) Each report shall be submitted to the Secretary of State not later than thirty days after the end of the period covered by the report, and the Secretary of State shall lay the report before Parliament.

(3) The first two months during which Part II of this Act is in force shall be covered by a separate report, and separate reports shall be made covering each subsequent period of three months during which Part II of this Act is in force (on the first or any subsequent occasion); and a separate report shall be made covering any terminal period short of three months.

(4) This paragraph shall have effect in relation to the Price Commission as if references to the Secretary of State were references to the Secretary of State and the Minister of Agriculture, Fisheries and Food, acting jointly'.—[Mr. Maurice Macmillan.]

Mr. Bruce-Gardyne: I beg to move Amendment No. 46, in page 21, line 35, after '(1)', insert
?Subject to the provisions of sub-paragraph (6) below'.

Mr. Deputy Speaker: With this amendment it will be convenient for the House to discuss Amendment No. 47, in page 22, line 25, at end insert—
'(6) Any inquiry under the terms of this paragraph shall be conducted by full-time members or employees of the agency and may not be delegated to other organisations or persons'.

Mr. Bruce-Gardyne: The substantive amendment is Amendment No. 47. The purpose of these amendments is to make sure that the Pay Board and the Price Commission, to put it crudely, do their own dirty work.
The situation under the late lamented National Board for Prices and Incomes, as the House may remember—and none better than my hon. Friend the Member for Oswestry (Mr. Biffen), for whose expertise in these archaic matters the entire House is indebted—was that the board farmed out its activities to a wide range

of consultancy organisations. We were never told which organisations they were or, indeed, told much about them at all, except that occasionally they reared their heads.
In moving a Ten-Minutes Rule Bill in April 1967 my hon. Friend the Member for Oswestry said——

Dr. Alan Glyn: I hope that my hon. Friend will be only a few minutes.

Mr. Bruce-Gardyne: I shall be longer than that, if my hon. Friend the Member for Windsor (Dr. Glyn) will forgive me. These are important matters.
I was about to say that my hon. Friend's Ten-Minutes Rule Bill was designed to ferret out more information about the consultancy services which the Prices and Incomes Board used, and I commend those who are interested in these matters to read that debate on 5th April 1967. The broad point that he was making, and I apologise for plagiarising on his industry of a previous incarnation in these matters, was that we knew nothing about the consultancy firms which were used. We were told from time to time people like the eminent Mr. Jarratt, who I imagine will figure prominently in one of the organisations we are appointing under the Bill, that the board had enlisted the support of various consultancy services for the purposes of its investigations, including in some cases foreign—for example, American—consultancy firms. My hon. Friend quoted Mr. Jarratt as saying:
We have a very full record of 200 consultancy firms, their field experience and so on."—[OFFICIAL REPORT, 5th April 1967; Vol. 744, c. 157.]
My hon. Friend conjured up a vision of these consultancy firms queueing up at the door—or was that on the Committee stage of the Bill? [Interruption.] My hon. Friend corrects me. That was on the Committee stage of the Bill. He raised the question of consultancy work in relation to Clause 12, I think. He obtained the following assurance from the Secretary of State:
First of all there is the question of management consultants. The Prices and Incomes Board tried to do studies in depth with efficiency audits and needed management consultant services. The agencies are only required to look at cases in the light of the code. They will not, therefore, require the


same type of consultant advice as did the Prices and Incomes Board."—[OFFICIAL REPORT, Standing Committee H, 19th February 1973; c. 973.]
We know that these bodies will apparently have 700 employees and, as my hon. Friend pointed out in Committee it will presumably take them some little time to acquire those employees. Meantime my right hon. and hon. Friends are hoping that the gasmen and others will be queueing up at their boards' doors for service. We must, therefore, assume that there will be a certain pressure on these boards in the early stages when, perhaps, their 700 employees have not been collected.
But in any case, even if the boards are up to full strength, we need to have some elucidation about the precise wording my hon. Friend used in Committee. He said
They—
meaning the boards—
will not, therefore, require the same type of consultant advice as did the Prices and Incomes Board."—[OFFICIAL REPORT, Standing Committee H, 19th February, 1973; c. 973.]
That may be, but what advice will they obtain? Now we have seen the code—and when these matters were discussed in Committee the code had not emerged —and we can see that the lengthy investigations which these eminent boards are to pursue are clearly far-reaching and wide-ranging.
In paragraph 54 of the Green Paper, in the part dealing with distribution, we read:
In order to assist enterprises to arrive at an appropriate reduction of percentage margins under paragraph 53, the Price Commission will, if satisfied that the sharp rises in costs referred to have taken place:—

(i) consult any body which they regard as representative of enterprises affected by the rise in costs and take into account information supplied by them; and
(ii) calculate an adjustment to gross margins designed to prevent net profit margins from rising substantially on those products, provided they are satisfied that:—

(a) these cost increases are likely to be broadly similar for a substantial number of such enterprises; and
(b) the maintenance of existing gross percentage margins would disproportionately increase the profit margin on those goods …".
Who is to do all the donkey work? Are the 700 employees of the Pay Board

and the Price Commission to do the work once they are recruited? Is nobody else to do it? Are no outside consultants to be used for any purpose? May we have that assurance? We did not receive it in Committee.
Of the many unattractive features of the Prices and Incomes Board, its habit of providing lucrative employment for outside consultancy agencies was not the least. The independent private agencies that it was using, in a sense bringing them under the umbrella of its statutory powers and privileges, were also commercial agencies that might well be dealing in a commercial capacity with firms whose affairs they were required to investigate.
Before we complete the Report stage we need a clearer and more specific undertaking than that which my right hon. Friend gave in Committee. If we receive the assurance that when he said that the Pay Board and Price Commission would not require the same type of consultant advice as did the Prices and Incomes Board he meant that the two bodies would rely entirely and exclusively on their own members and employees, the Government will, clearly, have no embarrassment in accepting the amendment. I shall then be entirely satisfied, as I hope the House in general will.

Mr. Deputy Speaker: Mr. Biffen——

Hon. Members: Oh no.

Mr. Biffen: The amendment merits the serious attention of the House, even at this hour of 10.40 in the evening, which I do not regard as absurdly late. It touches upon a principle of significance but, above all, of sheer practicality, in terms that I am sure will engage the interest of my hon. Friends the Members for Kingston-upon-Thames (Mr. Norman Lamont) and Kensington, South (Sir B. Rhys Williams), not to mention the hon. member for West Ham, North (Mr. Arthur Lewis), who would probably wish to take part in the debate but for the all-pervasive influence of the Opposition Deputy Chief Whip.
The amendment touches upon the question of just how the Government's policy will be put into effect if, as we are assured, the Price Commission will depend entirely on its own resources. Here I repeat a declaration of interest that I


made in Committee, that I am an unremunerated member of the board of a firm of management consultants, which I do not expect to be a beneficiary of the Bill.
We understand that the Price Commission will have a staff of between 450 and 500. That much emerged from the discussions in Committee. Presumably we must be in the process of recruitment at this moment. What kind of people are required in the Price Commission to carry out the investigations under the guidance of something which cannot be much dissimilar from the consultative document? The answer is self-evident. Accountants will be needed to work for the commission. We must inquire whether there is any prospect of the commission being able to recruit 500 accountants.

Mr. Joel Barnett: Not a hope.

Mr. Biffen: There we are. Who more expert and able to answer my question than the hon. Member for Heywood and Royton (Mr. Joel Barnett)? The fact is that phase 2 will be over and done with by the autumn. If we cannot recruit accountants——

Mr. Norman Lamont: Mr. Norman Lamont (Kingston-upon-Thames) indicated assent.

Mr. Biffen: My hon. Friend agrees with me. If we cannot recruit accountants in substance and in scale in the immediate future to deal with phase 2 of the policy, our credibility becomes that much more suspect.
I return to the words with which I opened my remarks. This is a matter not only of substance but of sheer practicality. I do not care if the debate is proceeding at a point mildly inappropriate for some hon. Members. If they do not wish to partake they can spectate For those of us who are concerned about the way in which the policy will work—the degree to which it will be random the degree to which it will be highly selective—the amendment goes to the heart of the matter. When my hon Friend the Chief Secretary replies, I shall be grateful if he will indicate in broad terms how many of the 400 to 500 staff who will serve in the Price Commission will be expected to have an accountancy background and accountancy experience,

and the scale of remuneration that they will receive to attract them into this aspect of Government.
Those of us with some experience of the Public Accounts Committee will recollect that the old Ministry of Aviation could not attract the right calibre of technical cost accountant on the Civil Service scales of pay. It is a germane point. Will the going rate attract accountants out of private industry and into the commission on a career basis? Presumably it cannot be on the basis of a short-term secondment, because an accountant taken from one company might have the opportunity to examine the practices of a competitive company. That point was raised in Standing Committe, and my hon. Friend the Parliamentary Secretary to the Civil Service Department was anxious to allay anxieties that were expressed.
I draw the attention of my hon. Friend the Member for Bromley (Mr. Hunt) and my hon. Friend the Member for Kingston-upon-Thames, who both have interests in the City of London, to the seeming contradiction in paragraphs 36 and 38 of the consultative document, which under the rubric "Price Reductions" says:
Where there is a fall in raw material prices or in other allowable costs, this should be fully reflected in price reduction. In addition prices should be reduced where other factors (such as an increase in the volume of sales since the last price increase) lead to a significant fall in allowable costs per unit.
Paragraph 38 says:
Prices should be determined so as to secure that net profit margins do not exceed the average level of the best two of the last five years of account of the enterpise concerned preceding 1 April 1973 (the reference level).
The reconciliation of the seeming contradiction is something that lies fully within the competence of my right hon. Friend the Secretary of State for Employment, the agencies and the accountants who will have to operate this policy. What I am saying is that we cannot just whistle up any spare office boys to do this task. It requires people of qualification.
10.45 p.m.
It may be thought that I am making slightly heavy weather of this point, but I am not, because when I went to my place of work this morning, by such means as I could, the first question put to me was: could I reconcile the seeming


contradiction between paragraphs 36 and 38? That seemed to be a thoroughly unfair burden to put on me, to be an exponent and defender of this policy. None the less, people engaged in industry and commerce are doing precisely this kind of exercise and saying "If we want to operate, broadly speaking, within the social parameter of behaviour set by the code"—whether or not it has legal sanction is another matter—"how do we set about it?"
But how much more should we in this House ask what will be the staff of the agencies who have to interpret the policy? What will be their qualification, if the work is not to be sub-contracted to outside organisations—and I welcome that decision. How are my hon. Friends to proceed to recruit the kind of staff to operate this policy with the speed that is seemingly indicated by the short-term limitation of phase 2?

Mr. Patrick Jenkin: Amendment No. 46 is a paving amendment and comes at the beginning of paragraph 14 of Schedule 1, while Amendment No. 47, which we are also discussing, would insert a new sub-paragraph (6) at the end of paragraph 15 of that schedule. But I take the point that the one is intended to refer to the other notwithstanding that they deal with different paragraphs, and on that assumption I will deal with the points my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has made.
My first point is that a distinction has to be drawn between what are referred to in the paragraphs as "inquiries" and what one might describe as, perhaps, investigations. The inquiries to which the two paragraphs are related are, clearly, formal inquiries, involving formal hearings. For instance, the question of the person who is to preside over the inquiry is relevant, and the next Government amendment deals with whether the inquiry should be in private or in public. Paragraph 15 goes on to deal with various other powers which the chairman of the agency, or any other member of the agency authorised by the chairman, may have in relation to the conduct of what I think are clearly envisaged as formal inquiries.
Part of my hon. Friend's amendment suggests that such an inquiry should be chaired only by a full-time member of the board or commission, but I suggest that that is perhaps an unreasonable requirement. I made it clear in Committee that in order to recruit people of the required calibre and experience we would wish to feel free to appoint members part time, and it may very well be that for a particular field a part-time member of the board would be the most appropriate person to chair the kind of formal inquiry with which these paragraphs are concerned. I could not advise the House to accept the limitation which my hon. Friend proposes, which would confine the chairmanship of these inquiries and the conduct of them solely to full-time members.

Mr. Bruce-Gardyne: Can my hon. Friend enlighten the House about the sort of activities in which he imagines part-time members of the board might be engaged when they are not engaged in Government business of this kind?

Mr. Jenkin: I will resist the temptation to be drawn into matters of that kind. The appointments will be announced in due course. It is frequent in public service for part-time members to be appointed to a variety of different boards, and we do not envisage any unusual characteristics being necessary for the appointment of part-time members here.
I turn to the point which formed the substance of the speeches made by my hon. Friends the Members for Oswestry (Mr. Biffen) and South Angus (Mr. Bruce-Gardyne). That was the problem of investigation as opposed to the formal inquiries at which these paragraphs are primarily aimed. Their point can be stated simply. They hope that the investigations which will be carried out by the Price Commission or the Pay Board will be carried out solely by members or employees of those bodies and not in any way sub-contracted out to professional firms or other outside bodies.
I am not sure I fully understand the objection which is offered to this practice. I have reminded myself, during the debate, of the point made by my hon. Friend the Member for Oswestry when he introduced a Ten-Minute Bill in


1967. He has already indicated in Committee that he thought the universities were stuffed with sociologists only too anxious to come and tell industry how it should organise itself.
Any public board of this sort which appoints outside firms of accountants, management consultants or such bodies will, naturally enough, choose people of the highest reputation and integrity to carry out the work. It would be unrealistic to imagine that in what are comparatively small bodies, 300 to 400 staff all told, there would be a sufficient range of expertise to cover the whole area. Certainly it is envisaged that outside firms of accountants would be employed to carry out some of the investigations.
It may well be that under the more general matters referred to the agencies under paragraph 1 of the schedule consultants will be appointed. What my right hon. Friend was referring to in column 973 was the question of implementing the code—that part of the functions of the agencies. As he said, this is not the same sort of inquiry as was carried out by the Prices and Incomes Board, which was an advisory body only. He was quite right to say that the agencies would not require the same type of advice.

Mr. Bruce-Gardyne: I cannot in all conscience see what difference there is between the type of external consultancy services which my hon. Friend is saying these new bodies will require and the type of consultancy services which the Prices and Incomes Board recruited. I submit that what he is saying makes nonsense of what my right hon. Friend said in Committee.

Mr. Jenkin: I do not think my hon. Friend follows what I am saying. I am saying that there is a distinction to be drawn between the two functions of the agencies——

Mr. Bruce-Gardyne: We are not talking about functions.

Mr. Jenkin: With great respect, I am. My hon. Friend may be talking about ambushes, but I am talking about gorse bushes. I am sure he knows the quotation. In the case of the executive function of the agencies—my right hon. Friend made it clear that that is what he was

talking about—it is not envisaged that substantial use would be made of consultants' advice. My right hon. Friend said:
agencies are only required to look at cases in the light of the code."—[OFFICIAL REPORT, Standing Committee H, 19th February 1973; c. 973.]
Agencies have the separate function of making advisory reports to Ministers. In those circumstances, we would envisage that such bodies as accountants and consultants would be used because the commission and board would not have the full range of expertise available to them. If the amendment were intended to preclude that kind of activity, I must advise the House that the Government would feel unable to accept it and I hope that hon. Members would resist it.
I should like to say a few words on the subject of confidentiality because I believe that it lies at the heart of my hon. Friends' anxieties on the use of outside bodies. Successive Governments have been concerned to ensure that confidential information secured by the Government or Government agencies should not be misused or disclosed without permission. Great trouble is taken and a double check approach is adopted. First, there is the protection of selection. Before anyone is chosen to serve on these bodies he has to pass through a careful selection process which should ensure that no one likely to divulge confidential information is chosen. Secondly, there is the strong back-up power which specifically bans disclosure and provides criminal penalties to deter anyone tempted to disclose information unlawfully, whether he is still employed by the agency or not. They are contained in paragraph 4 of the Fourth Schedule. These methods have been used successfully in the past by the Prices and Incomes Board, the Monopolies Commission and similar bodies.
I realise that this is a sensitive point, but I assure the House that it will be very much in the minds of my right hon. Friends when appointments to the Price Commission and the Pay Board are made. To emphasise our concern, we have decided to arrange that the provisions of paragraph 4 of the Fourth Schedule are drawn to the attention of those appointed to the agencies in their letters of appointment. I hope that hon. Members will


think that those are strong and effective safeguards.

Mr. Bruce-Gardyne: Can my hon. Friend assure the House that when the bodies use external consultancy services the details of the services used will be published in the reports made to the House?

Mr. Jenkin: That is not an unreasonable request and, without wishing to give any commitment, I shall ensure that it is examined. It is something which might reasonably be required. It may be appropriate, if a suitable occasion offers, for an announcement to be made in another place about it.
I hope that my hon. Friends will not feel it necessary to press the amendments.

Mr. Nicholas Ridley: It was almost the last remark of my hon. Friend the Chief Secretary which brought me to my feet.
I am a little worried about the use of management consultants who will obtain information from companies for non-formal inquiries and will, or may be, requested to publish it. It is quite wrong that there should be so many people whose job it will be to go over and over industrial situations, obtaining confidential information and publishing it either in full or in a half-digested form. The formal inquiries will be hard enough on their own because it will be necessary to ascertain complicated matters such as the ratio of depreciation, and the amount of profits and losses made in past years, which will in themselves require the exercise of considerable expertise.
When it comes to the informal inquiries, it seems to me that the range of information required can be extremely wide and confidential.

Mr. Bruce-Gardyne: There may be a slight misunderstanding. The assurance for which I asked the Chief Secretary was that the names of external consultancy services used should be published in the reports made to the House on the work of the Pay Board and the Prices Commission, not that the details of their inquiries should be published.

11.0 p.m.

Mr. Ridley: Yes. I think that that is a great help. I must have misheard my

hon. Friend. I entirely agree that that should be done.
However, there is for me still some anxiety over these outside consultants who will be asked to make inquiries into various industrial situations and be armed with powers of investigation under the Bill. They may obtain very confidential information. They will not be subject to the powers in the schedule which my hon. Friend read out, and they will not be subject to the Official Secrets Act, but they will, as employees of the commission, be in a very privileged position to discover confidential information while being under no more than a moral obligation not to divulge the information they obtain and not to use it for personal advantage. It is quite wrong that powers for seeking information should not be coupled with some obligation to respect secret information when it has been unearthed. It is this aspect—of the outside inquiry, rather than by a member of the commission—which worries me.

Mr. Bruce-Gardyne: I must say that the reply by my hon. Friend the Chief Secretary to this brief debate hardly silences all my anxieties on this subject. Indeed, to be honest, it rather arouses them. Above all, I confess to him, it arouses some doubt about the entire accuracy of the undertaking given by my right hon. Friend in Committee, and to which I have already referred. I think we have established that these two bodies—alas—will draw in external consultants' services as the late lamented Prices and Incomes Board used to do.
We have at least obtained from my hon. Friend one sop of appeasement in the shape of the undertaking to examine the possibility of at least informing the House in the quarterly reports of the details of the external consultancy services used. That is of significant importance, and I hope my hon. Friend will find it possible to honour that undertaking.
On that basis, and with very much reluctance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Patrick Jenkin: I beg to move Amendment No. 19, in page 21, line 45, after 'hearing', insert 'the Agency may direct that'.
This amendment is proposed to meet a point raised in Committee—I think by the hon. Member for Islington, East (Mr. John Grant)—suggesting that the agency should have some discretion to accede or not to accede to an application to exclude the public from an inquiry and that the inquiry should be in private. We thought that that was a good point, and we believe that these words give the agency that discretion.

Amendment agreed to.

Schedule 2

APPROVALS AND CONSENTS

The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): I beg to move Amendment No. 20, in page 23, line 12 leave out from 'to' to end of line 18 and insert:
restrict any price or charge, or any kind of remuneration, where the price or charge or remuneration is duly authorised by the approval".

Mr. Speaker: We can take this amendment and the Government's next Amendment, No. 21, together.

Sir G. Howe: I was going to suggest that, Mr. Speaker.
Originally, paragraph 1 (2) of the schedule was designed, as it is drawn, to say that if an agency approved an increase in a price it could not thereafter prevent that increase unless a fall occurred in the costs and outgoings which justified the increase. The purpose was to secure a degree of certainty after that point.
It is apparent, however, that the proviso to sub-paragraph (2) is too restrictive, because there are other circumstances in which a price, once it has been increased, may later need to be reduced. This may arise, for example, as a result of paragraph 16 of the code, where the costs originally justifying the increase have fallen, as a result of paragraphs 40 or 55 where profits are too high and beyond the permitted limit and paragraphs 53 and 54 where the margin turns out to be too high. That situation is provided for by the change proposed in paragraph 1(2) of the schedule so as to exclude the power to reduce prices where

the increase has been duly authorised by approval.
If that is read with new sub-paragraph (5) it shows that in the course of due authorisation the approval may be formulated in such a way as to secure that the rest of the code is observed—for example, the matters to which I have just referred. This means that the agency will be enabled to grant an approval, subject to conditions, for example, requiring a reduction in price, if costs fall or if profits exceed the expectation and so the limit. In other words, power is given to attach conditions to the approval. The power deriving from such a condition would be exercised only if circumstances had changed so as to justify or require it, and the object is to secure the most effective restraint in prices.

Amendment agreed to.

Amendment made: No. 21 in page 23, line 37, at end insert—
'(5) In exercising their powers under an order under this paragraph, an Agency may frame an approval of proposals for an increase in such way as appears to them appropriate for the purpose of ensuring that the provisions of the code are implemented'.—[Sir G. Howe.]

Mr. Maurice Macmillan: I beg to move Amendment No. 22, in page 24, line 30, at end insert—
'(3) Where an Agency or a Minister, grant a consent under this Act, particulars of the consent shall be published in the Gazette, and in such other ways as may be prescribed'.

Mr. Speaker: With this amendment we can discuss Government Amendments Nos. 54 and 55.

Mr. Macmillan: These three amendmenst meet the undertaking I gave in Committee that the agency or a Minister in granting a consent or issuing an order or notice under the Bill would see that it was published. Amendment No. 22 provides that particulars of the consent shall be published in the Gazette and in such other ways as may be prescribed.
Amendment No. 54 provides that where notice is given by an agency or a Minister under various provisions of the Bill dealing with prices, pay, insurance premiums, dividends or value added tax, particulars of the notice shall be published in the Gazette and in such other ways as may be prescribed.
Amendment No. 55 enables the Minister by regulations to lay down the way in which such an order, notice or consent shall be published.
The amendments meet points raised in Committee.

Amendment agreed to.

Schedule 3

SUPPLEMENTAL PROVISIONS

Amendment made: No. 54, in page 25, line 23, at end insert—
(10) Where a notice is given by an Agency or a Minister under any of the following provisions of this Act, that is—

section 6(3),
section 7(3),
subsection (2) of section (restriction of insurance premiums),
section 9, or
section 11,
particulars of the notice shall be published in the Gazette, and in such other ways as may be prescribed.—[Mr. Maurice Macmillan.]

Mr. Ronald Bell: I beg to move Amendment No. 49, in page 25, line 36, leave out 'modify' and insert 'restrict'.
When my amendment to remove from the Bill the power to interpret any phrase or expression occurring in Part II was not accepted by the Government early this morning I wondered whether it was still worth moving this amendment, inasmuch as the power to interpret any expression in Part II is so wide. Then I remembered the assurances I was given by the Chief Secretary about the innocuous nature of this power to interpret any expression in Part II, and I decided in the light of his assurances that the wording to which the amendment refers perhaps had its dangers after all.
Paragraph 2(1) of Schedule 3 says:
For the purposes of sections 5 to 7 of this Act … the following shall be treated as one person …
and then lists a number of combinations, such as

"(a) all the persons who successively carry on any business;
(b) the person having control of any company …"
and so on. Then, sub-paragraph (2) says:
An order or notice under sections 5 to 7 of this Act may exclude or modify the provisions of sub-paragraph (1) …

In other words, the Minister or one of the boards may by order exclude one of these categories of person who are deemed to be the person in charge of the operation—that is all right—but can also "modify", which could mean enlarging the definition of the category of person deemed to have made the transaction or to have made the charge or whatever it may be.
I realise that my hon. Friend the Chief Secretary and other Ministers have defended this kind of wide drafting by saying that the Bill must be made to cover everything, to sweep up all the possibilities, and to ensure that there can be no evasion. I do not find that a very satisfactory justification of drafting of this kind. What it really means is that the Minister or one of these boards can define the person in charge of the business as virtually anybody he or the boards want to define as a person in charge of the business, the person who is responsible for the act or the transaction being impugned.
I think it wrong that there should be this total lack of certainty. The person should be what the Minister says is the person, and I invite my hon. Friend to accept the amendment, thus making it clear that the only sort of modification which could be made in an order or notice would be a narrowing of the definition and not widening it beyond the already very wide—wide to the point of arbitrary—definitions which are in the Bill.

Mr. Patrick Jenkin: I wanted to hear what my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) had to say before deciding what would be the right thing to do here. He has explained the purpose of the paragraph and the effect of the amendment clearly. I assure him that the paragraph is necessary.
Experience under the Temporary Provisions Act has shown that confusion can arise when businesses change hands or when firms amalgamate in circumstances where an order or notice has been made making a price restriction or some other direction under the Act. But I see the justification of what my hon. and learned Friend says when he argues that, whereas sub-paragraph (2) might quite reasonably exclude any of the provisions of sub-paragraph (1), or restrict


them, it should not be able to enlarge them, and that there appears to be no limit, on the face of it, to the extent to which it could enlarge them. That would be bound to be so within the term "modify".
I accept the substance of the amendment, therefore, but I want to consider carefully whether its language is right. I accept that it is not right that the provisions of sub-paragraph (1) should be allowed to be enlarged upwards but that there should be power only to enlarge them downwards, as it were. I hope that in these circumstances my hon. and learned Friend will withdraw the Amendment.

Mr. Bell: I thank my hon. Friend, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.15 p.m.

Mr. Ronald Bell: I beg to move Amendment No. 50, in line 43, leave out sub-paragraph (2).
The sub-paragraph which I desire to be left out reads:
This paragraph applies both at a time when Part II of this Act is in force, and later.
That refers to the paragraph above, which says:
The Minister may by order prescribe the degree to which anything made illegal by any order or notice under Part II of this Act, or anything otherwise affected by any such provision, is to be valid or invalid.
I assume that the purpose of the provision which I desire to be left out is to enable a Minister or board to say that a transaction at which they have struck by an order or notice shall be not merely illegal but invalid, and shall remain invalid even after Part II of the Act has ceased to be in force. I do not think one could object to that, because it might be embarrassing if something which has been made invalid during the currency of the Act, some arrangement which is contrary to the Act, were to revive as soon as Part II went out of force.
It would appear that the way in which it is put would empower the Minister, after Part II of the Act had lapsed and at any period of time after Part II was no longer in force, to make an order

regulating the validity or invalidity of something done during the period when Part II was in full force and effect. That seems to me to be objectionable. It may be that I have misunderstood the intention or purport, and I should like to hear what my hon. Friend has to say about it.

Mr. Patrick Jenkin: I assure my hon. and learned Friend that it is not the intention that the Minister should be able to make an order after Part II has expired so as to affect the period when Part II is in force. The purpose is to make sure that an order made during the currency of Part II should remain in force after that period after Part II has come to an end. If there is any doubt about it, I shall want to look at it. But, having stated the intention, I hope my hon. and learned Friend will not press the amendment.

Mr. Bell: On the understanding that my hon. Friend will look at the matter, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 55, in page 26, line 26, leave out sub-paragraph (2) and insert—
'(2) The Minister may by regulations—

(a) prescribe the manner in which any order, notice or consent under this Act is to be published, or the manner in which particulars of any such order, notice or consent are to be published, and
(b) in the case of an order made under this Act by either Agency, prescribed the evidence which is to be sufficient evidence of its having been published, and of its contents and authenticity'.—[Mr Maurice Macmillan.]

11.18 p.m.

Mr. Maurice Macmillan: I beg to move, That the Bill be now read the Third time.
We have debated the Government's counter-inflation policy very fully. We began on 24th January, we took the Second Reading on 29th January, we had 10 sittings in the Standing Committee and we now had two full days on Report. On Monday we shall be debating the consultative document containing the draft code. Therefore, I shall be extremely brief.
The Bill has been improved by our discussions both upstairs and in the House, and that is as it should be. This


legislation will set up a Price Commission and a Pay Board and there will be two agencies which will enable them to operate the code, the first draft of which we shall be debating on Monday. I hope that I have made clear that the Government regard the Bill as an essential part of the counter-inflationary policy. I commend the Bill to the House.

11.20 p.m.

Mr. Benn: The Secretary of State has been very conciliatory to the Opposition throughout the passage of the Bill because he has not been allowed to be conciliatory to anyone else.
I, too, intend to be brief in putting on record our objection to the Bill. We think it unfair. It leaves out certain key prices. It will not work on the incomes side. It will operate arbitrarily under the cloak of artificial legality. It abdicates ministerial responsibility and derogates from our parliamentary rôle.
Having said that, it is a watershed of a Bill because it marks the end of a connection between the Conservative Party and its commitment to free enterprise upon which it won the General Election. We now know that Selsdon Man, like the Piltdown Man, was a hoax. The Bill opens up a great new era to which we shall return in our debate on the code on Monday.
Since many hon. Members on both sides of the House have little confidence in the Bill or in the Ministers who promote it, I invite my right hon. and hon. Friends to oppose it.

11.21 p.m.

Mr. Bruce-Gardyne: I do not intend to delay the House for very long, but I submit that we are discussing a piece of legislation which gives the Government very wide-ranging powers, and it is not totally unreasonable to spend a few minutes on the Third Reading.
My chief reason for intervening in the debate is to draw attention to two matters. I shall not pursue the argument of the right hon. Member for Bristol, South-East (Mr. Benn), because I believe that this is not a divorce from the free enterprise ethic. I believe, hope and trust that it is a brief separation.
The first matter which concerns me is the code. Enough has been said about

that tonight, and we shall discuss it in detail on Monday. But since the Second Reading of this legislation we have now seen the code, and it does not enhance my enthusiasm for the legislation in any way.
The second matter concerns me most on this Third Reading. It is that the legislation makes provision for a situation under phase 2 which is extremely disturbing in its implications for the private sector of the economy. We shall put companies in the private sector in a position where, if they do not observe the pay guidelines laid down by my right hon. Friends, whether they are subject to legal restraints or not they will be placed in a pillory before public opinion. If they observe the guidelines and find that they are the object of industrial action against the guidelines, judging by what has happened up till now, the attitude of my right hon. and hon. Friends will be that private employers must see the situation through and face the financial consequences. Potentially, this is very dangerous.
I referred earlier to the potential implications of the BRS strike for the finances of British-Leyland. I believe that we shall find that private companies are forced under the pay provisions of phase 2 to face a very embarrassing choice between the public pillory for flouting the guidelines which in themselves do not have legal force, and resisting strikes where they will face the financial consequences although they themselves are not directly masters of the situation.
This is very dangerous. Furthermore, we are likely to find ourselves landed with a queue of bankruptcies in the private sector induced by this legislation. I cannot believe that that is what my right hon. and hon. Friends desire at a time when they say that they wish to encourage private manufacturing investment.
It is with a heavy heart and considerable anxiety that I watch the House giving a Third Reading to this legislation.

11.25 p.m.

Mr. William Molloy: I do not believe that it is right and proper for the Bill to be given a Third Reading without putting it on record not only that what my right hon. Friend the


Member for Bristol, South-East (Mr. Benn) said about it is true but that, in addition, it is a fundamentally wrong, unjust and unfair measure.
I can understand the anguish of the hon. Member for South Angus (Mr. Bruce-Gardyne), because he is almost qualified to be the keeper of the soul of the Tory Party.
The most grievous thing about the Bill is that it adds to the ever-increasing list of examples of the Government's betrayal of the nation following its shabby treatment at the last General Election. The House has never before seen the equal of it. The Bill is one of the most massive betrayals that the country has had to endure from the Conservative Party, or from any other.

11.26 p.m.

Mr. Ridley: Whatever one thinks about the Bill and the policy that it contains, I still believe it to be right to pay a tribute to my right hon. Friend the Secretary of State, to my hon. Friend the Chief Secretary and to my hon. Friend the Parliamentary Secretary to the Civil Service Department for the courteous and painstaking way in which they handled the debates in Committee and on Report and for the efforts that they made to meet the valid and reasonable objections of hon. Members on both sides of the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 276, Noes 197.

Division No. 74.]
AYES
[11.27 p.m.


Adley, Robert
Crouch, David
Harrison, Col. Sir Harwood (Eye)


Alison, Michael (Barkston Ash)
Crowder, F. P.
Haselhurst, Alan


Allason, James (Hemel Hempstead)
Davies, Rt. Hn. John (Knutsford)
Hastings, Stephen


Archer, Jeffrey (Louth)
d'Avigdor-Goldsmid, Sir Henry
Havers, Sir Michael


Astor, John
d'Avigdor-Goldsmid,Maj.-Gen.Jack
Hawkins, Paul


Atkins, Humphrey
Dean, Paul
Hayhoe, Barney


Awdry, Daniel
Deedes, Rt. Hn. W. F.
Hicks, Robert


Baker, Kenneth (St. Marylebone)
Dixon, Piers
Higgins, Terence L.


Baker, W. H. K. (Banff)
Dodds-Parker, Sir Douglas
Hiley, Joseph


Batsford, Brian
Drayson, G. B.
Hill, John E. B. (Norfolk, S.)


Beamish, Col. Sir Tufton
Dykes, Hugh
Hill, S. James A.(Southampton, Test)


Bennett, Sir Frederic (Torquay)
Edwards, Nicholas (Pembroke)
Holland, Philip


Bennett, Dr. Reginald (Gosport)
Elliot, Capt. Walter (Carshalton)
Holt, Miss Mary


Benyon, W.
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Hooson, Emlyn


Berry, Hn. Anthony
Emery, Peter
Hordern, Peter


Biffen, John
Eyre, Reginald
Hornby, Richard


Biggs-Davison, John
Farr, John
Hornsby-Smith, Rt.Hn.Dame Patricia


Blaker, Peter
Fenner, Mrs. Peggy
Howe, Hn. Sir Geoffrey (Reigate)


Boardman, Tom (Leicester, S.W.)
Fidier, Michael
Howell, David (Guildford)


Boscawen, Hn. Robert
Finsberg, Geoffrey (Hampstead)
Hunt, John


Bossom, Sir Clive
Fisher, Nigel (Surblton)
Hutchison, Michael Clark


Braine, Sir Bernard
Flelcher-Cooke, Charles
Iremonger, T. L.


Bray, Ronald
Fookes, Miss Janet
Irvine, Bryant Godman (Rye)


Brewis, John
Fortescue, Tim
James, David


Brinton, Sir Tatton
Foster, Sir John
Jenkin, Patrick (Woodford)


Brocklebank-Fowler, Christopher
Fowler, Norman
Jennings, J. C. (Burton)


Brown, Sir Edward (Bath)
Fraser, Rt.Hn.Hugh (St'tford &amp; Stone)
Jessel, Toby


Bryan, Sir Paul
Fry, Peter
Johnson Smith, G. (E. Grinstead)


Buchanan-Smith, Alick (Angus,N&amp;M)
Galbraith, Hn. T. G. D.
Jones, Arthur (Northants, S.)


Buck, Antony
Gardner, Edward
Jopling, Michael


Bullus, Sir Eric
Gibson-Watt, David
Kaberry, Sir Donald


Burden, F. A.
Gllmour, Ian (Norfolk, C.)
Kellett-Bowman, Mrs. Elaine


Butler, Adam (Bosworth)
Gilmour, Sir John (Fife, E.)
Kilfedder, James


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Glyn, Dr. Alan
Kimball, Marcus


Carlisle, Mark
Godber, Rt. Hn. J. B.
King, Tom (Bridgwater)


Carr, Rt. Hn. Robert
Goodhart, Philip
Kinsey, J. R.


Channon, Paul
Goodhew, Victor
Kitson, Timothy


Chapman, Sydney
Gorst, John
Knight, Mrs. Jill


Chataway, Rt. Hn. Christopher
Gower, Raymond
Knox, David


Chichester-Clark, R.
Grant, Anthony (Harrow, C.)
Lamont, Norman


Churchill, W. S.
Gray, Hamlsh
Lane, David


Clark, William (Surrey, E.)
Green, Alan
Langford-Holt, Sir John


Clarke, Kenneth (Rushcliffe)
Grieve, Percy
Le Marchant, Spencer


Clegg, Walter
Griffiths, Eldon (Bury St. Edmunds)
Lewis, Kenneth (Rutland)


Cockeram, Eric
Grylls, Michael
Lloyd, Ian (P'tsm'th, Langstone)


Cooke, Robert
Gummer, J. Sekvyn
Longden, Sir Gilbert


Coombs, Derek
Hall, Miss Joan (Keighley)
Loveridge, John


Cooper, A. E.
Hall, John (Wycombe)
Luce, R. N.


Corfield, Rt. Hn. Sir Frederick
Hall-Davis, A. G. F.
MacArthur, Ian


Cormack, Patrick
Hamilton, Michael (Salisbury)
McCrindle, R. A.


Costain, A. P.
Hannam, John (Exeter)
McLaren, Martin


Critchley, Julian
Harrison, Brian (Maldon)
Maclean, Sir Fitzroy




McMaster, Stanley
Price, David (Eastleigh)
Taylor, Sir Charles (Eastbourne)


Macmillan,Rt.Hn.Maurice(Farnham)
Prior, Rt. Hn. J. M. L.
Taylor,Edward M.(G'gow, Cathcart)


McNair-Wilson, Michael
Proudfoot, Wilfred
Taylor, Frank (Moss Side)


McNair-Wilson, Patrick (New Forest)
Pym, Rt. Hn. Francis
Taylor, Robert (Croydon, N.W.)


Maddan, Martin
Raison, Timothy
Tebbit, Norman


Madel, David
Ramsden, Rt. Hn. James
Temple, John M.


Maginnis, John E.
Rawlinson, Rt. Hn. Sir Peter
Thatcher, Rt. Hn. Mrs. Margaret


Marten, Neil
Redmond, Robert
Thomas, Rt. Hn. Peter (Hendon, S.)


Mather, Carol
Reed, Laurance (Bolton, E.)
Thompson, Sir Richard (Croydon, S.)


Maude, Angus
Rees, Peter (Dover)
Thorpe, Rt. Hn. Jeremy


Maudling, Rt. Hn. Reginald
Rees-Davies, W. R.
Tilney, John


Mawby, Ray
Renton, Rt. Hn. Sir David
Tope, Graham


Maxwell-Hyslop, R. J.
Rhys Williams, Sir Brandon
Trew, Peter


Miscampbell, Norman
Ridley, Hn. Nicholas
Tugendhat, Christopher


Mitchell, Lt.-Col. C.(Aberdeenshire, W)
Ridsdale, Julian
Turton, Rt. Hn. Sir Robin


Mitchell, David (Basingstoke)
Roberts, Michael (Cardiff, N.)
van Straubenzee, W. R.


Moate, Roger
Roberts, Wyn (Conway)
Vaughan, Dr. Gerard


Molyneaux, James
Rossi, Hugh (Hornsey)
Vickers, Dame Joan


Money, Ernie
Rost, Peter
Waddington, David


Monks, Mrs. Connie
Russell, Sir Ronald
Walder, David (Clitheroe)


Montgomery, Fergus
Scott, Nicholas
Walker, Rt. Hn. Peter (Worcester)


More, Jasper
Shaw, Michael (Sc'b'gh &amp; Whitby)
Walker-Smith Rt. Hn. Sir Derek


Morgan-Giles, Rear-Adm.
Shelton, William (Clapham)
Wall, Patrick


Morrison, Charles
Shersby, Michael
Ward, Dame Irene


Mudd, David
Simeons, Charles
Warren, Kenneth


Nabarro, Sir Gerald
Sinclair, Sir George
Weatherill, Bernard


Neave, Airey
Skeet, T. H. H
Wells, John (Maidstone)


Nicholls, Sir Harmar
Soref, Harold
White, Roger (Gravesend)


Noble, Rt. Hn. Michael
Speed, Keith
Wiggin, Jerry


Normanton, Tom
Spence, John
Wilkinson, John


Nott, John
Sproat, Iain
Winterton, Nicholas


Onslow, Cranley
Stainton, Keith
Wolrige-Gordon, Patrick


Oppenheimm, Mrs. sally
Stanbrook, Ivor
Wood, Rt. Hn. Richard


Osborn, John
Steel, David
Woodnutt, Mark


Owen, Idris (Stockport, N)
Stewart-Smith, Geoffrey (Belper)
Worsley, Marcus


Page, Rt. Hn. Graham (Crosby)
Stodart, Anthony (Edinburgh, W.)
Wylie, Rt. Hn. N. R.


Pardoe John
Stoddart-Scott, Col. Sir M.
Younger, Hn. George


Parkinson, Cecil




Peel, Sir John
Stokes, John



Percival, Ian
Stuttaford, Dr. Tom
TELLERS FOR THE AYES:


Peyton, Rt. Hn. John
Sutcliffe, John
Mr. Oscar Murton and


Pink, R. Bonner
Tapsell, Peter
Mr. Marcus Fox.




NOES


Abse, Leo
Davis, Terry (Bromsgrove)
Houghton, Rt. Hn. Douglas


Allaun, Frank (Salford, E.)
Deakins, Eric
Howell, Denis (Small Heath)


Archer, Peter (Rowley Regis)
de Freitas, Rt. Hn. Sir Geoffrey
Huckfield, Leslie


Ashley, Jack
Dell, Rt. Hn. Edmund
Hughes, Rt. Hn. Cledwyn (Anglesey)


Atkinson, Norman
Dempsey, James
Hughes, Roy (Newport)


Barnes, Michael
Douglas, Dick (Stirlingshire, E.)
Hunter, Adam


Barnett, Guy (Greenwich)
Douglas-Mann, Bruce
Irvine, Rt. Hn. Sir Arthur (Edge Hill)


Barnett, Joel (Heywood and Royton)
Driberg, Tom
Janner, Greville


Benn, Rt. Hn. Anthony Wedgwood
Duffy, A. E. P.
Jay, Rt. Hn. Douglas


Bidwell, Sydney
Dunn, James A.
Jenkins, Hugh (Putney)


Blenkinsop, Arthur
Eadie, Alex
John, Brynmor


Boardman, H. (Leigh)
Edelman, Maurice
Johnson, James (K'ston-on-Hull, W.)


Booth, Albert
Edwards, Robert (Bilston)
Johnson, Walter (Derby, S.)


Bottomley, Rt. Hn. Arthur
Edwards, William (Merioneth)
Jones, Barry (Flint, E.)


Boyden, James (Bishop Auckland)
Ellis, Tom
Jones, Dan (Burnley)


Bradley, Tom
English, Michael
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)


Broughton, Sir Alfred
Evans, Fred
Jones, Gwynoro (Carmarthen)


Brown, Hugh D. (G'gow, Proven)
Faulds, Andrew
Jones, T. Alec (Rhondda, W.)


Brown, Ronald (Shoreditch &amp; F'bury)
Fisher, Mrs. Dorls(B'ham, Ladywood)
Judd, Frank


Buchan, Norman
Fitch, Alan (Wigan)
Kaufman, Gerald


Butler, Mrs. Joyce (Wood Green)
Fletcher, Raymond (Ilkeston)
Kerr, Russell


Cant, R. B.
Fletcher, Ted (Darlington)
Kinnock, Neil


Carmichael, Neil
Foot, Michael
Lambie, David


Carter, Ray (Birmingh'm, Northfield)
Ford, Ben
Lamborn, Harry


Carter-Jones, Lewis (Eccies)
Forrester, John
Latham, Arthur


Castle, Rt. Hn. Barbara
Fraser, John (Norwood)
Lawson, George


Clark, David (Colne Valley)
Freeson, Reginald
Lestor, Miss Joan


Cocks, Michael (Bristol, S.)
Galpern, Sir Myer
Lewis, Arthur (W. Ham, N.)


Cohen, Stanley
Gilbert, Dr. John
Lewis, Ron (Carlisle)


Concannon, J. D.
Ginsburg, David (Dewsbury)
Lipton, Marcus


Corbet, Mrs. Freda
Grant, John D. (Islington, E.)
Lomas, Kenneth


Cox, Thomas (Wandsworth, C.)
Griffiths, Eddie (Brightside)
Lyon, Alexander W. (York)


Crawshaw, Richard
Griffiths, Will (Exchange)
Lyons, Edward (Bradford, E.)


Cronin, John
Hamilton, James (Bothwell)
Mabon, Dr. J. Dickson


Crosland, Rt. Hn. Anthony
Hamilton, William (File, W.)
McBride, Neil


Cunningham, G. (Islington, S.W.)
Hardy, Peter
McGuire, Michael


Dalyell, Tarn
Harrison, Walter (Wakefield)
Mahon, Simon (Bootle)


Davies, Denzil (Llanelly)
Hattersley, Roy
Mallalieu, J. P. W. (Huddersfield, E.)


Davies, Ifor (Gower)
Healey, Rt. Hn. Denis
Marks, Kenneth


Davis, Clinton (Hackney, C.)
Heifer, Eric S.
Marquand, David







Marshall, Dr. Edmund
Peart, Rt. Hn. Fred
Stoddart, David (Swindon)


Mason, Rt. Hn. Roy
Perry, Ernest G.
Stonehouse, Rt. Hn. John


Meacher, Michael
Prentice, Rt. Hn. Reg.
Strauss, Rt. Hn. G. R.


Mellish, Rt. Hn. Robert
Probert, Arthur
Summerskill, Hn. Dr. Shirley


Mendelson, John
Rees, Merlyn (Leeds, S.)
Swain, Thomas


Mikardo, Ian
Rhodes, Geoffrey
Thomas,Rt.Hn.George (Cardiff, w.)


Millan, Bruce
Richard, Ivor
Thomas, Jeffrey (Abertillery)


Miller, Dr. M. S.
Roberts, Albert (Normanton)
Torney, Tom


Milne, Edward
Roberts,Rt.Hn.Goronwy (Caernarvon)
Tuck, Raphael


Mitchell, R. C. (S'hampton, Itchen)
Robertson, John (Paisley)
Varley, Eric G.


Molloy, William
Roderick, Caerwyn E.(Brc'n&amp;R'dnor)
Wainwright, Edwin


Morgan, Elystan (Cardiganshire)
Roper, John
Walden, Brian (B'm'ham, All Saints)


Morris, Alfred (Wythenshawe)
Rose, Paul B.
Walker, Harold (Doncaster)


Morris, Charles R. (Openshaw)
Rowlands, Ted
Weitzman, David


Morris, Rt. Hn. John (Aberavon)
Sheldon, Robert (Ashton-under-Lyne)
Wells, William (Walsall, N.)


Mulley, Rt. Hn. Frederick
Shore, Rt. Hn. Peter (Stepney)
Whitehead, Phillip


Murray, Ronald King
Silkin, Rt. Hn. John (Deptford)
Whitlock, William


Oakes, Gordon




Ogden, Eric
Silkin, Hn. S. C. (Dulwich)
Williams, Alan (Swansea, W.)


O'Halloran, Michael
Sillars, James
Williams, Mrs. Shirley (Hitchin)


O'Malley, Brian
Silverman, Julius
Wilson, Alexander (Hamilton)


Oram, Bert
Skinner, Dennis
Wilson, Rt. Hn. Harold (Huyton)


Orbach, Maurice
Small, William
Wilson, William (Coventry, S.)


Orme, Stanley
Smith, John (Lanarkshire, N.)



Owen, Or. David (Plymouth, Sutton)
Spearing, Nigel
TELLERS FOR THE NOES


Palmer, Arthur
Spriggs, Leslie
Mr. Donald Coleman and


Parry, Robert (Liverpool, Exchange)
Stallard, A. W.
Mr. Tom Pendry


Pavitt, Laurie
Stewart, Rt. Hn. Michael (Fulham)

Question accordingly agreed to

Bill read the Third time and passed.

ANTI-DISCRIMINATION (No. 2) BILL

Motion made, and Question proposed.

That Mrs. Joyce Butler, Mr. Patrick Cormack, Mr. W. W. Hamilton, Mr. Richard Hornby, Mr. Douglas Houghton, Mrs. Sally Oppenheim, and Mr. Rees-Davies be members of the Select Committee on the Anti-Discrimination (No. 2) Bill.—[Mr. Kenneth Clarke.]

Hon. Members: Object.

Debate to be resumed tomorrow.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Clarke.]

WRITTEN-OFF MOTOR VEHICLES (LOG BOOKS)

Mr. Ted Fletcher: In introducing this Adjournment debate I wish to draw attention to the question of cancellation of log books of written-off motor vehicles.
In 1971, according to police files, 721 cars in the county of Durham were rebuilt and put on the road again after being so extensively damaged in accidents that they were completely written off by insurance companies. On this basis I estimate that about 15,000 cars a year

are written off by insurance companies and subsequently rebuilt and sold. The figure given by the Vehicle Builders and Repairers Association is higher. That body suggests that 35,000 vehicles which have been involved in major accidents and have been repaired are put on the road again every year.
The rebuilding of a wrecked car is not illegal, and many of the repairs are carried out by reputable garage owners and the vehicles are then safe and roadworthy. These reputable people are behind me in the campaign to ensure that the disreputable dealer is put out of business
The real problem about which we are concerned is that many of these wrecked cars are patched up in back-street garages by dealers who are more interested in making a fast buck than in gaining satisfied customers. These shady traders cannot afford the expensive equipment which is necessary, the jigs and tools, to make car rebuilding safe. For example, they are unable to reline a badly buckled car, and the axles and steering will probably he out of true. Corroded bodywork is sometimes patched up with glass fibre, and this looks fine for about three weeks and then drops out.
In some cases when the dealer has a car with a smashed front he will cut the front off a similar model that has been damaged at the rear and weld one half to the other. When these cars are sold, often at inflated prices, they are a danger not only to the driver but to all road users. There must be protection against these practices.
About two years ago an intending purchaser of one of these cars knew whether the vehicle had been involved in a major accident because the words
This vehicle has been completely written off by an insurance company
were stamped on the log book. The system was discontinued about 18 months ago, and, as far as I am aware, no reasons have been given to the House. I understand from a Press statement that was issued by the Department that the system was ended because it was felt that the damaged cars which had been repaired were not a road hazard. So, at the moment no one can know from the log book whether the car has been rebuilt from a write-off or not.
My first question to the Minister, therefore, is: why was the scheme for stamping log books discontinued and why can it not be reintroduced? I realise that this would be only an interim solution to cover the period until the new licensing computer at Swansea is in full operation. In the meantime some consideration will have to be given to a more comprehensive scheme. For example, I should like to see the log book for this type of vehicle withdrawn and reissued only when the office in Swansea had received a satisfactory inspection report from the Ministry's inspectors. That, however, would require amendments to existing legislation, or new legislation, and I cannot pursue that in the course of an Adjournment debate.
The Department is being much too complacent about what I regard as a very serious problem. The Minister informed me in December 1971 that he was setting up a departmental committee to consider the whole problem. On 5th December 1972, I received a letter from him, after submitting one or two questions and corresponding with him, advising me that the Department had come to the conclusion that these reconstituted wrecked cars were only a minor factor in road safety. He admitted in the letter that there were few statistics available to support this view, and he realised, too, that the study of the West Yorkshire police had reported that 2·5 per cent. of the accidents in that area involving personal injury were attributed to cars that had previously been wrecked and put back on the road.
I do not know what 2·5 per cent. of the present level of road accidents is, but it must run into several thousands. But one sample is unreliable, and it seems to me that the Minister has arrived at his decision on inadequate information. He certainly consulted the chief constables, but, because of the absence of the stamp on the log book, reliable statistics are not available.
My request to the Minister, therefore, is to revert to the old system of stamping the log books of write-offs as an interim measure, pending the introduction of legislation that will take away the licence of a write-off until it is certified to the Department's satisfaction to be roadworthy.
There is widespread concern about the present situation. The Vehicle Builders and Repairers Association, the Motor Agents Association and the Institute of Automobile Assessors have been pressing the Department about the matter for many months. They are reputable organisations representing competent garage proprietors with nothing to lose from the inspection of written-off vehicles. They are just as anxious as I am, and as anxious as the Department should be, to put the disreputable backstreet dealers out of business.
When I made a BBC radio broadcast on the problem about a year ago I received letters from all parts of the country. Some of them were heartbreaking. For example, a man in Manchester withdrew his life savings of £900 to buy a Cortina, only 12 months old, to take his invalid wife out into the country. He thought it was a bargain, but after a few weeks it began to drop to pieces. He then discovered that it was a write-off, extensively damaged in an accident.
It is all very well for the Minister to say, as he did in a letter to me, that people should take precautions when they buy a car and should have it examined by a competent examiner. Many people meet fast-talking, plausible salesmen and it is very difficult for them to resist their blandishments.
In the short term we must return to the practice of stamping the log book when a car is written off, and in the long term we must consider how the law can be changed. My whole purpose is to ensure that no sub-standard restorations


are allowed to reach the hands of unsuspecting drivers who would be a danger not only to themselves but to other road users. Many thousands of people, particularly those who have bought reconstituted vehicles, will be interested in the Minister's reply to this short debate.
The problem will grow, because the motor trade will have to absorb VAT in the near future. That will mean that the costs of repairs and spares will increase, and, as a result, insurance companies will be writing off even more cars.
I urge on the Minister the policy that I have suggested, but I also draw his attention to the lapse of time since I first raised the matter. It was raised in my local newspaper, the Darlington Evening Gazette, about 15 months ago, as a result of which I received a number of letters from constituents. Having tackled the problem, I was advised that the matter was under consideration by a departmental committee. In response to Questions, I was assured that a report would be available shortly. In fact, we have a report saying that there is nothing to investigate, that there is no problem. I am certain from the letters I have received that there is a problem and that it will continue.
The question is one not only of road safety but of consumer protection. People are entitled to know when they are purchasing a second-hand car whether it has been involved in an accident and been completely written off by an insurance company, and whether it is roadworthy. The Department owes them to duty not only to consider re-introducing the stamping of the log book but to give long-term consideration to changing the law so that all such cars can be inspected by competent people before a licence is issued.

11.50 p.m.

Dr. Reginald Bennett: I am sure that the hon. Member for Darlington (Mr. Ted Fletcher) is performing a most valuable function in bringing this matter before the House. It is unduly long in coming before the House because the change in procedure dates from 15 months ago or more. At that time I made some representations to the Department.
I must confess an interest as a member of the Council of the Institute of Motor

Auctioneers. I think that the hon. Member for Darlington will probably agree that it is probably the auctioneers who are most at risk in handling cars. They take them as found, and it is only after the cars have been processed and disposed of that investigation may find that the customer has bought something which is not safe and about which nobody knew anything. The whole motor trade, every part of it, is at risk, to say nothing of the public who are destined to be hurt or even killed in these dangerous vehicles that are at present allowed to return to the roads without any apparent sign of their unworthiness.
I would quote rather than paraphrase an inter-office memorandum of one of the motor auction firms of over a year ago. It says:
The effect of this new instruction is that it is not possible for anyone to find out for themselves whether the vehicle has been written off or not. The licensing authorities will not tell us when we ask, but when a member of the public or other person applies to tax the vehicle, the licensing authority still send the 'pink form' to the police. The police then simply turn up on the new owner's doorstep and calmly announce to them that the vehicle has been involved in a major accident and has been 'written-off'. They then proceed to inspect the vehicle in case it has been repaired with stolen parts, that is, 'rung'. The new owner throws up his hands in horror and takes the vehicle back to his seller for redress, thus starting a chain reaction in reverse.
I have proof of one such vehicle, the salvage of which was purchased by a dealer in Ashby-de-la-Zouch from the Royal Insurance Group with a clean log book. The dealer rebuilt the vehicle and entered it at Measham, stating 'No' to out question, 'Has the vehicle been an insurance total loss?' It was only when a member of the public, the final purchaser, applied to tax it and the licensing authority notified the police on the pink form' that it all came to light. The police are going to visit the present owner. The auction purchaser was in fact a dealer and will obviously lose his profit when his customer rejects the vehicle.
I know that it is true that the log book is no document of title. That is a plausible and good argument. But surely we must have some check, before the last minute of the licensing, on the reconditioning of rubbish that is put on the road. The Government are responsible entirely for the deaths of people killed in such vehicles if they do not become more strict. Certainly the insurance companies should carry liability


indefinitely for any written-off vehicle. This is a murderous practice, and it is incredible that it should have been allowed, and I implore the Government to do something about it.

11.53 p.m.

Mr. Ernle Money: I hope that my hon. Friend will be able to reassure those members of the public who have been worried by the suggestion that it might be the intention of his Department to abandon the traditional log book and use some form of yearly certificate.

The Under-Secretary of State for the Environment (Mr. Keith Speed): I thank the hon. Member for Darlington (Mr. Ted Fletcher) for raising a matter about which he has broadcast and about which I contributed to Motoring and the Motorist some weeks ago
I am sure that every hon. Member and certainly my Department will support the object of keeping dangerously defective vehicles off our roads. It is a problem which is certainly in the forefront of my right hon. Friend's mind and of my mind, and in the Department we are constantly looking for ways and spending a great deal of money in trying to ensure that road safety is advanced, but we must spend money and do things in an effective way, as I am sure the hon. Gentleman would be the first to agree.
The basic problem in considering the whole question of written-off vehicles is that the phrase, unfortunately in practice does not mean what might seem to be implied. In insurance company terms, a written-off vehicle means one on which the insurer has made a total loss payment; but this is not a satisfactory way of defining potentially dangerous vehicles, and that for two main reasons. The first is that the insurer's decision to make a total loss payment now depends on economic factors as well as on engineering factors, and must depend a great deal on the value of the vehicle at the time of the accident; its age, general condition, cost of repair, and so on.
Let me give a simple illustration. If the hon. Gentleman had a 1959 Austin A30 which was involved in an accident, where perhaps the cost of repairs would be £100 and the car was worth only £60, that would be a total loss. But if he had

10-year old Rolls-Royce on which the repairs might be £3,000, the cost of the repairs would be substantially below the then value of the vehicle and there would not be a total loss.
Secondly, total loss payments do not adequately identify all vehicles that have suffered serious damage in accidents, because many of these vehicles are insured only for third party and, therefore, no payment would be made to the owner for total loss——

Mr. Fletcher: I understand that 80 per cent. of insured vehicles are comprehensively insured.

Mr. Speed: The figure that was mentioned earlier was 25 per cent. for third party, but, even so, 25 per cent. is 25 per cent. of about 15 million vehicles, which is an awful lot of vehicles, and I am sure the hon. Gentleman will agree that we are still talking in terms of millions of vehicles.
Some badly damaged vehicles which are comprehensively insured may not be taken in by the insurance company but may be left with the owner with a corresponding reduction in monetary compensation. The hon. Member will know that that has happened to a considerable extent in the past. Therefore, there is really no guarantee if we revert to the system applicable in 1971. Apart from this, it is perfectly possible to make some vehicles fully roadworthy again even after serious damage. It is, as I have already outlined, a question of how much it is worth while spending on the vehicle to get it fit for the road rather than whether it is technically possible to repair it adequately.
For all these reasons, to endorse the log book of a vehicle on which a total loss payment has been made, or cancel it in order to prevent the vehicle being used on the road again, is, as a long-term answer, not a satisfactory means of dealing with the problem from a road safety point of view.
Perhaps I can answer the first question by recalling that a scheme was tried in 1967 under which, when they took in a seriously damaged vehicle which was subject to an insurance claim and on which a total loss payment was made, the insurers notified the local taxation office, which then endorsed the registration book with the words "Seriously damaged vehicle. Insurance total loss payment


made." The scheme was suspended in 1971 because of the reasons I have given, and because the insurers told us that it was causing some reputable insurance companies severe financial loss, while it appeared that less reputable companies were faced with the temptation to which they sometimes gave way of leaving the vehicle with the owner rather than taking it in as a total loss in circumstances where failure to notify the local taxation office might be justified by straining at the interpretation of "seriously damaged."
I can tell my hon. Friend the Member for Ipswich, (Mr. Money) that a new form of log book will be coming in with centralised licensing at Swansea. There will be a log book for each vehicle and owner, and when the ownership changes the log book will change with it, providing a particular document for a vehicle and the owner. We shall be advising the House and the public in more detail in due course.
Eventually there will be substantial advantages which will enable us to licence a vehicle from day to day rather than month to month. In consultation with the Home Office and chief constables, my Department has concluded that this issue, while it may be a problem in regard to consumer and other matters, is not a major road safety problem. When I have gone into the figures I hope to carry the hon. Gentleman with me on this.
Various studies in different parts of the world have shown that mechanical defects are responsible for only a small proportion of personal injury accidents. We asked the chief constables and they reported that in only a few isolated instances would the relevant defects have been caused by inadequate repairs to seriously damaged vehicles.
The hon. Gentleman rightly said that there are few statistics available showing the precise extent of the problem. Perhaps I can expand a little upon the answers which the West Yorkshire police gave, because, with respect to the hon. Gentleman, he did not quite interpret my right hon. Friend's letter of December correctly. The West Yorkshire police made a special study and said that in 1971 there were 9,612 accidents in their area involving personal injury. Everyone will agree that is a large number for a reasonable statistical sample. If

the hon. Gentleman reads HANSARD tomorrow he will see that he perhaps did not get it quite right. Mechanical defects were reported as a contributory factor in 2·5 per cent. of these accidents.

Mr. Fletcher: The letter actually says:
2·5 per cent. of the accidents in that area in 1971 involved personal injury and in no case was the accident attributable to a vehicle being in an unsatisfactory condition due to a previous accident in which it had suffered serious damage.

Mr. Speed: That is just what I am saying. In no case was it found that the accidents were attributable to a vehicle being in an unsatisfactory condition due to a previous accident in which it had suffered serious damage. This was a thorough investigation. This is the main burden of the evidence that we have when discussing these problems. We must take real cognisance of this study.
It seems that special, complicated measures to tackle this problem cannot be justified on road safety grounds. We deal with the wider problem of checking cars for mechanical defects by making an annual inspection of all cars over three years old compulsory. We very much encourage prospective buyers of secondhand cars to have the vehicle tested before purchasing. The hon. Member mentioned the glib salesman and how a person making a purchase involving £900 can be carried away. Unless a person buying a car is doing so through a highly reputable dealer, giving a cast-iron guarantee, he ought to have the vehicle tested before purchasing.
It is sometimes suggested that garages should be prevented by law from repairing or rebuilding seriously damaged vehicles. This is not a reasonable proposition because with modern equipment and skilled staff it is feasible to restore many such vehicles to a roadworthy condition. In my radio broadcast I said that if anyone can produce substantial evidence that written-off vehicles present a significant accident danger I am prepared to look carefully at that evidence and re-consider our policy. I give hon. Members that assurance. So far no such evidence has come in. On the evidence we cannot see reasons, on road safety grounds, for changing the present policy.

Question put and agreed.

Adjourned accordingly at five minutes past Twelve o'clock.